EBA欧洲银行-Final-draft-ITS-amending-ITS-on-Supervisory-reporting-of-FINREP-28EBA-ITS-2016-0729_70页_1mb

Summary of EBA/ITS/2016/07: Final Report on Amending FINREP Templates Following IFRS 9

Core Content

This document outlines the final draft of Implementing Technical Standards (ITS) that amend the Commission Implementing Regulation (EU) 680/2014 on supervisory reporting of financial information (FINREP) to align with the changes introduced by IFRS 9. The amendments are designed to ensure consistency and comparability of financial reporting across EU institutions, particularly for cross-border supervision and risk assessment.

Main Objectives

• Update FINREP templates to reflect the changes in IFRS 9, which replaced IAS 39 as the standard for financial instruments.
• Ensure consistency between IFRS and GAAP templates to support a comprehensive view of risk profiles.
• Maintain uniform reporting requirements across all EU Member States as part of the single rulebook initiative.
• Improve data quality and transparency in financial reporting for supervisory purposes.

Key Changes

1. IFRS 9 Classification and Measurement

• Deletion of 'Held to Maturity' portfolio.
• Replacement of 'Available for Sale (AFS)' with 'Fair Value through Other Comprehensive Income (FVOCI)'.
• Replacement of 'Loans and Receivables' with 'Amortised Cost'.
• New rows and instructions in templates F1.3 and F3 to reflect changes in fair value measurement of equities and credit risk.
• Removal of the fair value option in template F41.2 for financial assets.
• Limitation of hybrid instrument information to those designated at fair value through profit or loss.
• Removal of the amount contractually required to be repaid for liabilities at fair value through profit or loss.

2. IFRS 9 Impairment

• FINREP templates F4.3.1, F4.4.1, F7 and F12 have been modified to reflect IFRS 9 impairment stages.
• Separation of credit-impaired financials, contract assets, and lease receivables in impairment templates.
• Inclusion of information on partial and total write-offs, and their accumulated amounts, in templates F4.3.1, F4.4.1 and F12.
• Breakdown of changes in impairment allowance by different drivers in template F12.1.
• Reporting of impairment status and changes in allowance separately for individually and collectively measured exposures.
• Impact of asset modifications is reported in both P&L (template F2) and impairment allowance (template F12.1).
• Transfer of assets between impairment stages is detailed in template F12.2.
• Template F16.7 has been replaced by F16.1 to report interest income for assets in impairment Stage 3.
• Template F16.01 includes a new row for interest income from derivatives in economic hedges.

3. IFRS 9 Hedge Accounting

• Insertion of new rows and columns in templates F1.3, F3, F41.2, F10, F16.3 and F16.5 to reflect the new hedge accounting rules.
• Change in label of row 150 in F1.3 to 'Hedging derivatives. Cash flow hedges reserve [effective portion]'.
• Introduction of new templates:
  • F11.3: Reporting on non-derivative hedging instruments.
  • F11.4: Reporting on hedged items and the impact of fair value hedges.
• Addition of a new row in template F16.01 for interest income from derivatives in economic hedges.
• Clarification that clean price accounting can be used for both hedging and trading derivatives.

4. Reporting of Non-Performing Exposures and Forbearance

• Definitions of non-performing exposures and forbearance remain relevant despite the shift from IAS 39 to IFRS 9.
• These definitions are used as benchmarks for assessing asset quality across different accounting frameworks.
• Enhanced granularity in reporting non-performing exposures, including:
  • Separate identification of Stage 2 and Stage 3 expected loss allowances.
  • Detailed breakdown of exposures, value adjustments, and geographical/sectorial information.
  • Identification of non-performing exposures past-due by more than 5 years.

5. Reporting of Mortgage Loans

• Mortgage loans are defined as loans collateralised by immovable property (residential or commercial), regardless of the loan-to-collateral ratio.
• Loans guaranteed by insurance companies are not considered as mortgage loans and are instead reported under 'loans secured by financial guarantees' in template F13.
• Clarification provided to avoid misinterpretation of the term 'mortgage loans'.

Key Information

• Scope: The changes apply to credit institutions and investment firms using IFRS or GAAP for financial reporting.
• Effective Date: The first application date for institutions with a January–December accounting year is 1 January 2018, with the first reference date being 31 March 2018.
• Regulatory Context: The amendments are based on the EU-endorsed version of IFRS 9 and aim to support the single rulebook in Europe.
• Public Consultation: The EBA conducted a decentralised consultation to gather feedback and ensure alignment with industry needs.
• Annex Replacements:
  • Annex III of Regulation 680/2014 (FINREP IFRS templates) is replaced by Annex I of the final draft ITS.
  • Annex IV (FINREP GAAP templates) is replaced by Annex II.
  • Annex V (FINREP instructions) is replaced by Annex III.

Next Steps

• The draft ITS will be submitted to the European Commission for endorsement.
• Once endorsed, the updated templates and instructions will be published in the Official Journal of the European Union.
• The updated standards will apply to institutions based on their accounting year and the first date IFRS 9 becomes applicable in the EU.