Implementing Technical Standards on amendments to FINREP due to IFRS 9

These final draft ITS include changes for reporting of financial information (FINREP) following endorsement of IFRS 9 in the EU. The main changes relate to IFRS 9 but also include changes for national GAAP reporters to ensure consistent information. The amendments will be applicable for reporting from beginning of 2018.

Documents

Links

Implementing Technical Standards published on the Official Journal

News

EBA acknowledges the Commission adoption of amended supervisory reporting standards due to FINREP IFRS 9

05 July 2017

The European Banking Authority (EBA) acknowledged the adoption by the European Commission of the Implementing Act amending Regulation (EU) No 680/2014 (Implementing Technical Standards on Supervisory Reporting) with regard to financial reporting (FINREP) following the changes in the International Accounting Standards (IFRS 9). The Implementing Act, which is based on the final draft ITS on supervisory reporting submitted by the EBA in November 2016, was adopted by the Commission on 29 June 2017 and its publication in the EU Official Journal is still pending. The amended requirements will apply as of 1 March 2018 (reporting framework v2.7).

The act and annexes as adopted by the European Commission are published under the following links:

The related documents published on EBA's website have been updated to reflect the adoption of the Implementing Act (see Implementing Technical Standards on Reporting and Reporting framework 2.7).

EBA updates XBRL taxonomy 2.7 for supervisory reporting

27 April 2017

The European Banking Authority (EBA) published today an update to the XBRL taxonomy that Competent Authorities should use for the remittance of data under the EBA Implementing Technical Standards (ITS) on supervisory reporting. The revised taxonomy will be used for reference dates from 31 March 2018 onwards.

The documents published today include the following:

A set of XML files forming the XBRL taxonomy;
A description of the architecture of the XBRL taxonomy;
A description of the Data Point Model (DPM), of which the taxonomy is a standardised technical implementation, including both a database and document representations, along with a description of the formal modelling methodology by which the DPM is defined.

Applicability

Reports with reference dates as of 31 March 2018 onwards are to use the new taxonomy set (2.7), which is related to the April 2017 framework release.

Background and legal basis

The taxonomy defines a representation for data collection under the reporting requirements related to own funds, financial information, losses stemming from lending collateralised by immovable property, large exposures, leverage ratio, liquidity ratios, asset encumbrance, additional liquidity monitoring metrics, supervisory benchmarking and funding plans. As part of enhancing regulatory harmonisation in the EU banking sector and facilitating cross-border supervision, uniform data formats are necessary to enable comparable data on credit institutions and investment firms across the EU.

Although, the EBA XBRL taxonomy was primarily developed for data transmission between Competent Authorities and the EBA, many authorities have been using it for the collection of supervisory reporting from the credit institutions and investment firms they supervise. In this respect, the taxonomy proposed by the EBA will lead to greater efficiency and convergence of supervisory practices across Members States. In addition, it will facilitate the supervisory process, allowing supervisors to identify and assess risks consistently across the EU and to compare EU banks in an effective manner.

EBA seeks input at national level on FINREP and GAAP

23 March 2016

The European Banking Authority (EBA) launched today a public consultation on reporting financial information using Generally Accepted Accounting Practices (GAAP) across EU jurisdictions. This is a decentralised public consultation, which takes place through National Competent Authorities across the EU and not through the EBA, so as to allow for a better informed discussion on questions that may be specific to the individual jurisdictions across the EU. All interested stakeholders can provide feedback directly to their National Competent Authorities (NCAs) by 15 April 2016.

The update process of the FINREP GAAP templates currently in use by institutions across the European Union (EU) has identified specific issues linked to national accounting frameworks across the EU. The EBA is now seeking the input from all those EU institutions that report financial information to their competent authorities through the FINREP framework and on the basis of national GAAP practices. As this is a decentralised public consultation, all concerned stakeholders will be able to provide feedback to their NCAs on the changes proposed by the EBA for the reporting templates (Annex IV).

National GAAP practices are closely linked to individual EU jurisdictions and the EBA believes that a decentralised consultation will benefit from the expertise of the authorities competent for each jurisdiction or Member State. Comments received by the EU banking industry will ensure that the regulatory package on financial reporting is appropriately tailored and will be included by the EBA in the updated version of the templates it is proposing.

All concerned parties are invited to contact directly their National Competent Authorities (NCAs) by 15 April 2016 in order to provide their feedback. The EBA will subsequently release a comprehensive and updated version of FINREP, covering both Annex III and Annex IV (IFRS and GAAP templates), and it will also amended Annex V (instructions) accordingly.

Legal basis

This public consultation follows on from a previous consultation in December 2015 on suggested changes to financial supervisory reporting (FINREP) which is based on the new IFRS 9 requirements. In order to allow some further analysis by the EBA on the interaction between GAAP practices and the FINREP framework, the templates and instructions related to the GAAP reporting were not included in December and are being consulted upon now.

EBA launches consultation on FINREP using IFRS 9

08 December 2015

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

Press Release

EBA amends supervisory reporting standards due to the new IFRS 9

30 November 2016

The European Banking Authority (EBA) published today its amended final draft implementing technical standards (ITS) on the reporting of financial information. The amended ITS follow the finalisation of IFRS 9 in July 2014 by the International Accounting Standards Board (IASB) and its endorsement into EU law on 22 November 2016 and aim at aligning the reporting framework with the new IFRS 9 requirements while ensuring reporting institutions have adequate implementation time.

Overview of the changes to FINREP templates

Most of the amendments to these final draft ITS reflect the changes brought about by the new IFRS 9 requirements although the EBA deemed necessary to review also some parts of the FINREP framework based on the experience gained through the submitted data and the feedback received from compiling banks. The amendments also reflect the EBA's review of templates and instructions used by institutions under the national General Accepted Accounting Principles (GAAP) so as to ensure the integrated framework for supervisory reporting of financial information is aligned.

In particular, refinements have been brought to the concepts of gross carrying amount, accumulated changes in fair value due to credit risk, non-performing and forborne exposures, the reporting of economic hedges, investments in associates, subsidiaries and joint ventures and their dividends, mortgage exposures, and the counterparty of financial assets.

Other changes resulted from specific requests received in the consultation and from issues identified via the Single Rulebook Q&A process which needed to be addressed to ensure better quality in the reporting of information.

These changes apply to both IFRS and GAAP templates.

Implementation and remittance date

The first reporting reference date will follow the first application date of the EU-endorsed IFRS 9 for each institution. If an institution has an accounting year lasting from January to December, the first application date will be 1 January 2018, with a first reference date of 31 March 2018.

Legal basis

These draft ITS have been developed in accordance with Article 99 of Regulation (EU) No 575/2013, which requires the EBA to develop ITS specifying supervisory reporting in the areas of own funds requirements and financial information. These final draft ITS amend and update Regulation (EU) No 680/2014.

Consultation Papers

Consultation on reporting financial information using GAAP

Summary 23/03/2016

Legal basis

Consultation on Implementing Technical Standards on proposed amendments to FINREP IFRS due to IFRS 9 (EBACP 2015 23)

Summary 08/12/2015

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.

Implementation timeline

Consultation process

Legal basis

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

Responses

Public Hearing

Note: A Public Hearing is related to this consultation but is not visible to public users since the date is past