On November 24, 2016, the EBA announced the launch of a second impact assessment on the implementation of International Financial Reporting Standard 9. The second impact assessment builds on the findings in the first impact assessment that was published by the EBA in a report on November 10, 2016. The Report analyzes the estimated impact of implementing IFRS 9 on firms and their regulatory capital and assesses the interaction between IFRS 9 and other prudential requirements. The implementation efforts by firms (such as the development of processes, systems and models) are ongoing and the EBA expects that implementation measures will continue to evolve until at least the initial application of IFRS 9 on January 1, 2018. The EBA highlights that smaller banks are lagging in preparation compared to larger banks and notes that firms should not underestimate the work required to implement IFRS 9.
The second impact assessment will include questions focused on specific aspects around the main topics and findings from the first impact assessment. The EBA expects more detailed and accurate information from banks relating to their implementation of IFRS 9 than the previous assessment, as the information previously given reflected that banks were at an early stage of implementation.
The second assessment is one of several steps that were proposed in the Report to assist in monitoring the implementation of IFRS 9. The EBA also proposed ongoing dialogue on the implementation issues outlined in the Report through engagement with the EBA, firms and auditors and considering additional regulatory guidance on the interaction between existing prudential requirements and the applicable accounting framework. This includes any guidance on transitional arrangements for the application of revised accounting frameworks and clarifications regarding the current RTS for specifying specific credit risk adjustments and general credit risk adjustments.
The Report is available at: http://www.eba.europa.eu/documents/10180/1360107/EBA+Report+on+impact+assessment+of+IFRS9 .
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