Financial Accounting Framework

Business decisions are driven by numbers. If the numbers lack integrity, decision makers cannot trust that they are grounding decisions in robust financial information and therefore any plans are built on unstable ground.

The new technologies and digitalization are affecting financial accounting and risk management in the organizations. To keep pace with the changing business environment and advancements in technology development of an interdisciplinary, holistic and integrated approach is necessary.
 

How Deloitte can help?

We help clients address key financial reporting, accounting and control needs resulting from changing accounting and regulatory requirements, capital markets transactions, acquisition, and divestiture transactions, and changing business requirements with special focus on the following IFRS standards:

1. IFRS 9, Financial Instruments

Deloitte supports organizations on their journey towards IFRS 9 accounting adoption, models development and validation, compliance, verification and reporting. We enable organizations to design and implement comprehensive IFRS 9 framework and ensure benefits of best practice in model design, model implementation, and data management.

Areas we can help you include the following:

1.1. Classification and Measurement.

1.2. Modelling and Validation of ECL (Expected Credit Loss) and Risk Parameters:

1.2.1. Stage 1 and Stage 2 modelling (1 year, Lifetime): PD (Probability of Default), LGD (Loss Given Default), EAD&CCF (Exposure at Default & Credit Conversion Factor).

1.2.2. Stage 3 modelling (Lifetime): LGD and EAD&CCF.

1.2.3. POCI – Purchased of Credit Impaired Financial Assets.

1.3. Calculation of Effective Interest Rate (EIR) and Credit Adjusted Effective Interest Rate (CAEIR).

1.4. Hedge Accounting.

1.5. Financial Instruments Modifications.

1.6. New Definition of Default (integration with other risk management frameworks).

1.7. Documentation, Data Quality and Data Integrity Validation (DIV).

1.8. KPIs, monitoring and reporting.

1.9. Deloitte’s tools implementation (Finaware, F-Lite).
 

2. IFRS 13, Fair Value Measurement

Introduction of “exit price” concept throughout measuring assets, liabilities, or own equity instruments is in the essence of IFRS 13. Deloitte supports organization in adoration and verification of methodologies for definition of Fair Value, application of measurement approach, valuation techniques, presentations and disclosures.

3. IFRS 16, Lease

IFRS 16 defines a lease term as the noncancellable period for which the lessee has the “right to use” asset that must be recognized on the balance sheet. Deloitte helps you to cope with implementation challenges related to technical accounting aspects as well as to systems and processes. With the professional services and custom-built application, we give you the ability to easily manage lease contracts and comply with IFRS 16.

4. IFRS 37, Provisions Contingent Liabilities and Contingent Assets

Adaptation of the concept of uncertainty about the timing or the amount of the future expenditure required, as being outlined in the accounting for provisions, measured as the best estimate (including risks and uncertainties) of the expenditures for settlement of the present obligations. Deloitte is your advisor in IFRS 37 methodology development and verification by applying extensive local and global experience gained.