Featured Product

    FRC Welcomes Report on Recommendations for IFRS 9 ECL Disclosures

    November 28, 2018

    The Financial Reporting Council (FRC) of the UK welcomed the report on recommendations for a comprehensive set of IFRS 9 expected credit loss (ECL) disclosures published by the Taskforce on Disclosures about Expected Credit Losses. The report presents the Taskforce's recommended disclosure requirements for ECL in a tabular format, along with the relevant IFRS disclosure requirements.

    The report first sets out the disclosure principles used by the Taskforce in developing its recommendations as well as considerations applicable to all the recommended disclosures in respect of the scope, timing, frequency, location, and granularity. It then summarizes what the Taskforce views as the most important ECL considerations while explaining the related disclosures, why they matter to users, and where in the report the related recommendation can be found. As per the Taskforce, the most important considerations for ECL relate to policies and methodologies; alignment between accounting for credit losses and credit risk management activities; forward-looking information; movement and coverage across stages; changes in the balance sheet ECL estimate; credit risk profile; regulatory capital; governance and oversight; and measurement uncertainty, future economic conditions, and critical judgments and estimates. Finally, the report sets out the disclosure recommendations of the Taskforce in tabular format, along with the relevant IFRS disclosure requirements. 

    The ECL impairment model introduced by IFRS 9 will have a significant effect on how banks calculate loan-loss provisions. Given the complexity of these models and the high degree of management judgment involved in these calculations, high-quality disclosures are an essential element of successfully implementing this new requirement. These disclosures should, among other things, clearly set out the accounting judgments exercised by management and provide information about the estimation uncertainty inherent in the calculations. To facilitate the provision of high-quality disclosures, FRC, along with PRA and FCA, sponsored the Taskforce, which comprises preparers and users, to build on the existing disclosures in IFRS 7 and develop further guidance on high-quality disclosures about ECL. The report acknowledges that some of the recommendations are stretching and may require a number of years to be implemented.

     

    Related Links

    Keywords: Europe, UK, Banking, Accounting, IFRS 9, ECL, Disclosures, Task Force, PRA, FCA, FRC

    Featured Experts
    Related Articles
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    News

    HKMA Revises Implementation Schedule for Initial Margin Rules

    HKMA intends to adopt a revised implementation schedule for the margin requirements for non-centrally cleared derivatives.

    August 16, 2019 WebPage Regulatory News
    News

    HKMA Revises Guideline on Application of Banking Disclosure Rules

    HKMA issued a revised version of the Supervisory Policy Manual module CA-D-1 on guideline on the application of the Banking (Disclosure) Rules (BDR).

    August 16, 2019 WebPage Regulatory News
    News

    ECB Decision on Recognizing Reporting Member States Under AnaCredit

    ECB has finalized the Decision 2019/1348 (ECB/2019/20) that establishes procedure for recognizing non-euro area member states as reporting member states under the AnaCredit Regulation (EU 2016/867).

    August 16, 2019 WebPage Regulatory News
    News

    FASB Proposes to Extend CECL Standard Deadline for Certain Entities

    FASB proposed an Accounting Standards Update that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases, and hedging.

    August 15, 2019 WebPage Regulatory News
    News

    IASB Adds Phase Two of IBOR Reform to Its Work Plan

    IASB (or the Board) has added the second phase of its project focused on potential financial reporting implications linked to the interest rate benchmark reform—interbank offer rate (IBOR) reform—to its work plan.

    August 15, 2019 WebPage Regulatory News
    News

    FED Updates Draft Instructions for Proposed FR Y-14 Reporting Forms

    FED updated draft instructions for the monthly, quarterly, and annual capital assessments and stress testing reports, also known as forms FR Y-14M, FR Y-14Q, FR Y-14A, respectively.

    August 15, 2019 WebPage Regulatory News
    News

    FASB Proposes Taxonomy Changes Related to Topics 326, 815, and 842

    FASB is proposing taxonomy improvements for the proposed Accounting Standards Update on clarifying the interactions among topic 321 on investments in equity securities), topic 323 on investments under equity method and joint ventures), and topic 815 on derivatives and hedging.

    August 15, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3665