Should we adjust template EU CR2-A in order to facilitate the implementation of the EBA Guidelines on disclosure?
Based on the EBA Guidelines on disclosure requirements under Part Eight of CRR (EBA/GL/2016/11) published on 2016 which remarked that, whenever possible, the EBA will base its templates and guidance on the supervisory reporting framework (COREP and FINREP) in order to facilitate the implementation of the guidelines, should we adapt the EU CR2-A template to the new FINREP F12.1 or remain it as is?
With the entry into force of IFRS9 several FINREP templates (as part of the supervisory reporting) have been modified in order to collect the relevant information due to the new accounting rule. Specifically, template EU CR2-A (Changes in the stock of general and specific credit risk adjustments), prior to the entry into force of IFRS9, was directly mapped from FINREP's F12.1 reporting. However, with the entry into force of DPM 2.7 in early 2018, this FINREP template has been modified, whilst, EU CR2-A remains unchanged. Based on the EBA Guidelines on disclosure (EBA/GL/2016/11) published on 2016 which remarked that, whenever possible, the EBA will base its templates and guidance on the supervisory reporting framework (COREP and FINREP) in order to facilitate the implementation of the guidelines, should we adapt the EU CR2-A template to the new FINREP F12.1 or remain it as is?
Template F 12.00 of Annex IV to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) which is reported by institutions applying a national GAAP based on BAD includes a breakdown of drivers of the movements in credit risk adjustments aligned with the drivers described in the rows of template EU CR2-A of the EBA/GL/2016/11. It also includes a breakdown between specific and general allowances. Therefore, these N-GAAP institutions should be able to map the information that they need to disclose in template EU CR2-A with the information that they have to report in template F 12.00. In line with the instructions of disclosure template CR2-A, these institutions can include additional rows to the disclosed template if they consider it relevant.
Institutions applying IFRS or applying a national GAAP compatible with IFRS should make use of the flexibility allowed by template EU CR2-A in the EBA/GL/2016/11. They should add the relevant rows that better reflect the drivers of the changes in their credit risk adjustments, in line with the drivers and figures that they report in template F 12.01 of Annexes III and IV to the ITS on Supervisory Reporting. and that reflect the disclosure requirements included in Article 442 of Regulation (EU) No 575/2013 (CRR) Similarly they should drop those rows included in template CR2-A of the EBA/GL/2016/11 that are not relevant anymore.