EBA欧洲银行-2009-07-27-28CEBS-CL-ED-Derecognition29_6页_158kb

CEBS Comments on IASB's Exposure Draft: Derecognition

Core Content

The Committee of European Banking Supervisors (CEBS) has provided feedback on the International Accounting Standards Board (IASB)'s Exposure Draft on Derecognition (ED). CEBS is composed of high-level representatives from banking supervisory authorities and central banks in the European Union, and it emphasizes the importance of sound, high-quality accounting and disclosure standards for the banking and financial industry.

The main focus of the CEBS comments is on the proposed derecognition model, particularly its implications for repurchase agreements and securitisation transactions. CEBS believes that the current risk and rewards test is a more appropriate and robust basis for determining derecognition, and that the proposed model may not enhance the decision-useful information for users of financial statements.

Main Points

1. Concerns About the Proposed Derecognition Model

• CEBS questions the practicality and relevance of the proposed model, especially regarding the 'practical ability to transfer' test.
• This test is considered unreliable because it depends on the transferee's ability to transfer, which may not be consistently assessed.
• CEBS is worried that this could lead to double counting or no accounting of assets, depending on the judgment of both parties.
• The distinction between 'readily obtainable' and 'not readily obtainable' assets introduces uncertainty and divergence in assessments over time.

2. Repurchase Agreements

• Repurchase agreements are common in the banking sector, used for both monetary policy and consumer lending.
• CEBS argues that the current treatment as secured financing accurately reflects the economic substance of these transactions.
• The proposed model may misrepresent the economic reality, as it could derecognise assets that are still subject to significant risk and reward.
• CEBS is concerned about the recycling of unrealised gains and losses through the income statement and the prohibition of using held-to-maturity assets in repurchase agreements.

3. Securitisation Transactions

• Under the proposed model, entities with a subordinated interest or credit enhancement in a pool of assets would not be able to derecognise any of the assets.
• This could lead to inappropriate accounting for securitisation transactions, especially given the EU legislation requiring a 5% retention of securitised assets from 2011.
• CEBS believes that a risk transfer approach is more suitable for determining asset recognition, and supports the continuation of the risk and rewards test.

4. Disclosure Requirements in IFRS 7

• CEBS acknowledges the aim of the ED to improve disclosure standards for off-balance sheet activities, including derecognised financial assets.
• It supports the extension of IFRS 7 disclosure requirements to these assets, as it aligns with the disclosure recommendations from the Financial Stability Forum.
• CEBS emphasizes that disclosure of management judgments is crucial to help users understand the economic substance of transactions.

5. Call for Field Tests and Convergence with FASB

• CEBS urges the IASB to conduct field tests and impact analyses before finalizing the proposals.
• It recommends that the IASB and the Financial Accounting Standards Board (FASB) work together to achieve convergence on derecognition criteria.
• CEBS is concerned that the proposed model may increase the gap between IASB and FASB, especially given that the FASB treats repurchase agreements as secured borrowings, and thus does not derecognise underlying assets.

Key Recommendations

• Reconsider the proposed derecognition model for repurchase agreements and securitisations.
• Maintain the risk and rewards test as the basis for derecognition.
• Provide further guidance on the 'readily obtainable' criterion and its relation to active and inactive markets.
• Conduct field tests and impact analyses before finalizing the ED.
• Coordinate with FASB to ensure convergence in derecognition standards.

Conclusion

CEBS supports high-quality accounting standards, but believes that changes should only be made if they lead to real improvements in the usefulness of financial information. It urges the IASB to carefully consider the practical implications of the proposed model and to ensure consistency with related standards and regulatory changes.