IASB Publishes Summary of the July 2019 Meeting of Advisory Forum
IASB published a summary of the meeting of the Accounting Standards Advisory Forum (ASAF), along with the agenda papers and recordings. The meeting was held during July 11, 2019 to July 12, 2019 at the IFRS Foundation office in London. IASB staff asked ASAF members for information about the current state of interest rate benchmark reform (IBOR reform) in their jurisdictions and their views on what specific financial reporting issues they have identified and whether and how IASB should address these issues as part of the phase II of the project.
The European Financial Reporting Advisory Group (EFRAG) member said that EFRAG had not yet discussed nor reached a conclusion on the Phase II issues. However, respondents that replied to the draft comment letter of EFRAG suggested issues that should be addressed in Phase II. These include de-recognition and modification of financial instruments, re-calibration of hedging accounting relationship, and changes in hedge documentation. Other ASAF members agreed with this list being the main issues that need to be addressed in the second phase. Additionally, some of these members highlighted the following issues:
- Derecognizing a financial instrument and recognizing a new one as a result of the changes from IBOR reform could have a consequential effect on the potential move of those financial instruments between different impairment stages.
- Given the large number of contracts that are referenced to IBOR, IASB should consider if there is a possibility to allow for some type of practical expedients when considering the scope of the amendments so that the transition process becomes less burdensome for entities.
- There is a need for information on the timeline for Phase II.
- IASB may consider aligning, to the extent possible, the proposed amendments with other standard-setters (particularly FASB), that are also undertaking standard-setting activities to address similar matters.
Keywords: International, Accounting, Banking, Securities, IBOR, Interest Rate Benchmarks, Financial Instruments, Hedging, IFRS 9, ASAF, FASB, IASB
CECL, IFRS 9, and IFRS 17 expert; credit risk and insurance risk specialist; strategic planning and credit analytics solutions consultant
CECL adoption expert; engagement manager for loss estimation, internal risk capability enhancement, and counterparty credit risk management
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023