July 13, 2017

EBA is consulting on a set of guidelines that specify a uniform format for the institutions' disclosure requirements of International Financial Reporting Standard 9 (IFRS 9) and analogous expected credit losses (ECLs) transitional arrangements. The draft guidelines consider the developments at the international level and specify the uniform disclosure format that institutions shall apply for this purpose. The consultation runs until September 13, 2017.

The guidelines aim to enhance consistency and comparability of information disclosed by institutions during the transition to full implementation of the new accounting standard. They have been developed in accordance with the new Article 473a, paragraph Eight, included in the proposal, adopted by the EC, to amend Capital Requirements Regulation or CRR (EU Regulation No 575/2013) regarding the transitional period for mitigating the impact on own funds of the introduction of IFRS 9. The following options are proposed for the banks:

To phase-in the impact of the implementation of IFRS 9 and analogous ECLs

To recognize the full impact of IFRS 9 and analogous ECLs on capital and leverage ratios from January 01, 2018 or before the end of the transitional period

 

Banks will have to include, in their Pillar 3 disclosures, their capital and leverage ratios, with and without the application of the transitional arrangements, to enable users to determine the impact of the arrangements on those ratios. It is crucial that a uniform format on the disclosure of these parameters is used to ensure that institutions' Pillar 3 disclosures on capital and leverage ratios are consistent across the EU during the transitional period.

 

Related Link: Consultation Paper (PDF)

Comment Due Date: September 13, 2017

Keywords: Europe, EBA, IFRS 9, CRR, Banking, Pillar 3, Basel III

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