IFRS 9: Almost done it! But, not quite yet…

The European Banking Authority (EBA) published on Friday its final Guidelines on disclosure requirements of IFRS 9 or analogous expected credit losses (ECLs) transitional arrangements. The guidelines specify a uniform disclosure template institutions shall use when disclosing the information on own funds, capital and leverage ratios, with and without the application of transitional arrangements for IFRS 9 or ECLs. The aim of these Guidelines is to ensure consistency and comparability of the data disclosed by institutions during the transition to the full implementation of the new accounting standard and to foster market discipline.

Following the application of IFRS 9 as of 1 January 2018, institutions will be allowed to phase-in the impact on capital and leverage ratios of the impairment requirements resulting from the implementation of the new accounting standard.

Institutions that decide to apply the IFRS 9 or analogous ECLs transitional arrangements are required to publicly disclose their own funds and capital and leverage ratios both with and without the application of these arrangements in order to enable users of this information to determine the impact of such arrangements. 

To ensure consistency of the disclosure of these parameters, it is crucial that a uniform format is used. These Guidelines specify the uniform disclosure format institutions shall use for this purpose. The Guidelines also take into account the developments on disclosure at international level, namely the standards on Pillar 3 disclosure requirements, issued by the Basel Committee on Banking Supervision (BCBS) on 29 March 2017, which foster comparability of capital metrics with non-EU international active banks.

Please refer to EBA website for further information

How can we help?

The interim and annual disclosures of 2018 will be closely monitored by investors, industry bodies and prudential regulators, as IFRS 9 is one of the largest changes to financial reporting since the introduction of IFRSs. These stakeholders will continue applying pressure for more detail to be provided, although it is still uncertain if banks will be able to do so.

Our experienced team is ready and willing to support you in all processes post-IFRS 9 transition, including financial statements and disclosures preparation.

In case you are looking for more detailed information and examples of the disclosure impact, please refer to the illustrative financial statements in our disclosures publication here .