EBA published amendments to the implementing technical standards on supervisory reporting with regard to the reporting of financial information or FINREP. The amendments concern the reporting requirements on nonperforming exposures (NPE) and forbearance to allow monitoring of reporting institutions' NPE strategies, the reporting requirements on profit and loss items, and the implementation of the International Financial Reporting Standard on leases (IFRS 16). The standards will be submitted to EC for adoption, along with the final draft standards on COREP changes, which were published in May 2019. Publication of the corresponding Data Point Model (DPM) and XBRL taxonomy is expected in August 2019. The technical standards will apply from June 01, 2020 and the first reporting reference date will be June 30, 2020.
These final draft implementing technical standards amend the EC's Implementing Regulation (EU) No 680/2014 on supervisory reporting with regard to FINREP. These standards aim to improve the reporting requirements on non-performing exposures and forbearance to strengthen supervisors' ability to assess and monitor these exposures. The amended standards allow more granular information to be collected on these exposures on a recurring basis, thus closing the identified data gaps. To ensure proportionality, only institutions having a nonperforming loan (NPL) ratio equal to or greater than 5% are required to report more granular information.
Other changes concern the reporting requirements on profit or loss items, in particular additional details on operating and administrative expenses to allow supervisors to make an in-depth analysis on reporting institutions‘ cost structure and to monitor the impact of reporting institutions‘ remuneration policies. These changes apply to both IFRS and N-GAAP reporters. Finally, for IFRS reporters, minor changes were brought about by the implementation of IFRS 16, as this new standard has replace the International Accounting Standards (IAS) 17 since January 01, 2019. Under IFRS 16, the main change is to the accounting of leases by the lessee: the differentiation between finance and operating leases has been removed and assets and liabilities are, with limited exceptions, recognized in respect of all leases. Considering the revised accounting rules, some minor changes to FINREP are made to obtain a complete view of the main impacts on lessees’ financial situation and profit or loss.
Effective Date: June 01, 2020
Keywords: Europe, EU, Banking, Reporting, FINREP, NPE, NPLs, IFRS 16, Leases Standard, Implementing Technical Standards, Proportionality, EBA
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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