EBA launches consultation on FINREP using IFRS 9

The European Banking Authority (EBA) launched today a consultation on the reporting of financial information for institutions using IFRS (FINREP IFRS). The proposed amendments follow the finalisation of IFRS 9 by the IASB in July 2014 and aim at collecting early industry views on changes that IFRS 9 would trigger to FINREP. This consultation is distinct from the on-going IFRS 9 endorsement process and does not relate to financial information reported by institutions using national generally accepted accounting practices (GAAP). The consultation will run until 8 March 2016.

Proposed amendments to FINREP IFRS

The proposed amendments accommodate the changes in IFRS 9 compared to the current IAS 39 and include the following:

changes for the measurement of financial instruments depending on the characteristics of cash flows and the business model within which the instrument is held; the new impairment model based on expected losses determined in accordance with the credit quality stage of a financial instrument;
changes in the accounting for hedging operations closer to risk management.

This has entailed the deletion and addition of some rows and templates. The proposed amendments to FINREP templates and instructions are addressed to IFRS reporters and the EBA will consider at a later stage whether any adjustments are needed for non-IFRS reporters.

Implementation timeline

The proposed revisions are based on IFRS 9 as issued by the IASB and will be finalised once IFRS 9 is endorsed by the EU in accordance with the due process in Regulation (EU) No 1606/2002 (the IFRS Regulation). This consultation has no link to this endorsement process. FINREP IFRS will apply for the first reference date following the date at which IFRS 9 becomes mandatory in the EU. Assuming the implementation date is not modified compared to the IASB version, the first application date would be 1 January 2018 and the first reporting reference date 31 March 2018.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the “send your comments” button on the consultation page. Please note that the deadline for the submission of comments is 8 March 2016.

The public hearing for the ITS will take place at the EBA premises on 5 February 2016 from 13.00 to 14.30 UK time. All contributions received will be published following the close of the consultation, unless requested otherwise.

Legal basis

These draft ITS have been developed in accordance with Article 99(2) of Regulation (EU) No 575/2013

Link to EBA statement

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

Posted in UncategorizedTagged

Leave a Reply

Your email address will not be published. Required fields are marked *