Implementing the new IFRS 9 expected credit loss model for banks Harmonizing business processes, financial reporting and regulatory requirements

Transcription

1 Implementing the new IFRS 9 expected credit loss model for banks Harmonizing business processes, financial reporting and regulatory requirements Date: 9 June 2015 Venue: Washington SyCip Development Center, 2nd Floor SGV Building I, Ayala Avenue, Makati City Time: 8:00 a.m. - 5:30 p.m. Implementing the new IFRS 9 expected credit loss model for banks 1

2 A one-day intensive learning program comprising of lecture supplemented with examples, illustrative cases, and Q&As, designed to provide participants with an understanding of the concepts and principles of the new expected credit loss model under IFRS 9 and the relevant regulatory requirements, including a high-level discussion of credit risk modelling Background The 2008 financial crisis exposed the too little, too late weakness of the incurred loss model provisioning requirements under International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement. In response to the delayed recognition of credit losses, the International Accounting Standards Board (IASB) issued the new impairment requirements that are based on a more forward-looking expected credit loss model (ECL). Date: 9 June 2015 Venue: Washington SyCip Development Center, 2nd Floor, SGV Building I, Ayala Avenue, Makati City The seminar will start promptly at 8:30 a.m. and will end by 5:30 p.m. Registration starts at 8:00 a.m. Last year, the IASB issued the final version of International Financial Reporting Standards (IFRS) 9 Financial Instruments, bringing together the classification and measurement, impairment and hedge accounting phases of the IASB s project to replace IAS 39 and all previous versions of IFRS 9. The new impairment model in the standard is designed to recognize credit losses earlier by requiring an allowance for either a 12-month or lifetime ECL. Although the standard will apply to all entities, financial institutions such as banks will be most affected as their portfolios are largely comprised of financial assets measured at amortized cost or at fair value through other comprehensive income (FVOCI). Adopting the ECL requirements will require significant efforts, thus, necessitating a timely and effective preparation. About the speakers Our resource speakers are partners and managers from SGV who have significant experience in the interpretation and implementation of accounting standards particularly for financial instruments and fair value measurement. Most of our speakers specializes in the areas of banking, risk management, Basel, investment analysis, valuation of financial instruments including derivatives, value-at-risk (VaR) validation and audit, IAS 39 and IFRS 9. 2 Implementing the new IFRS 9 expected credit loss model for banks

3 Who Should Attend? Officers and staff from the following functions: Credit risk policy and management Credit risk modelling Controllership and finance Corporate planning Treasury and treasury operations Internal audit How this seminar will benefit you Equip bank personnel with the fundamental knowledge and understanding of the core concepts and principles of the ECL model under IFRS 9 as well as the relevant regulatory requirements Enable bank personnel to perform initial assessments and start the necessary preparations for an effective and successful transition to IFRS 9 Guide banks in finding efficient ways on how to conduct the impact assessment and implementation activities Provide insights on how banks could synchronize changes made to business processes, financial reporting and regulatory requirements Implementing the new IFRS 9 expected credit loss model for banks 3

4 Seminar outline AM I. Overview on IFRS 9 Financial Instruments Classification and Measurement and Hedge Accounting II. IFRS 9 Financial Instruments Impairment of Financial Assets A. Historical overview B. Incurred loss (IAS 39) vs. Expected loss model (IFRS 9) C. Objectives of the expected loss model D. Financial assets within scope E. Relevant regulatory guidance for banks 1. Basel Committee Consultative Document on Guidance on accounting for expected credit losses 2. BSP Circular 855 on Guidelines on sound credit risk management practices F. Mechanics of the general three-bucket model 1. Stage 1 12-month expected credit loss allowance 2. Stage 2 Lifetime expected credit loss allowance 3. Stage 3 Lifetime expected credit loss allowance (credit impaired) G. Determining significant increases in credit risk 1. Changes in the risk of a default occurring 2. Factors or indicators of changes in credit risk 3. Defining the transfer criteria what is significant? 4. Simplifications and presumptions in assessing significant increase in credit risk PM H. Applying the three-bucket model Measurement of expected credit losses 1. Defining default month versus lifetime expected credit losses 3. Expected life versus contractual period 4. Probability-weighted outcome 5. Time value of money 6. Collateral 7. Use of reasonable and supportable information 8. Capturing future default events and the need for forecasting 9. Contrasting expected credit loss concepts from Basel and IFRS 9 I. Exceptions of the general three-bucket model 1. Trade receivables 2. Credit impaired J. Special applications 1. FVOCI assets 2. Loan commitments 3. Financial guarantee contracts 4. Revolving credit facilities 5. Initially credit-impaired assets 6. Modified or restructured assets 7. Trade and lease receivables III. Disclosure requirements IV. Effective date and transition V. Key differences from the FASB US GAAP proposals VI. Business impact and implementation challenges 4 Implementing the new IFRS 9 expected credit loss model for banks

5 10% discount if you send three (3) or more participants Seminar fee Php12,500, inclusive of VAT, a.m. and p.m. snacks, lunch and reading materials. Important cost saving information Multiple Booking Discount Companies can avail of a 10% discount if they send three (3) or more participants. In-company Training When you avail of our in-company training, you will enjoy the following benefits: Savings on training cost. With people interested in availing of this seminar, you will be able to enjoy substantial savings. Customized topics and targeted training. We will ensure that the content is tailored and targeted to your needs. Location and dates of your choice. We will travel to your location and conduct this seminar on the schedule that would be most amenable to you. Registration form Please accomplish this form. Company information and participant details Company: Contact person: Company address: Telephone no.: Fax: Check/Deposit slip no.: Amount: Full name (To be printed on certificate of attendance) Designation address Dietary restrictions, if any Implementing the new IFRS 9 expected credit loss model for banks 5

6 Payment instructions 1. Please make checks payable to SGV & Co. and kindly write the name(s) of the participant(s) and your company at the back of the check. Attaching the registration form would also be acceptable. 2. Deposits directly made to SGV & Co. at BPI-Ayala Branch with account number are also accepted. Please fax to , addressed to Ms. Yvette Batalon, or a copy of the deposit slip together with the accomplished registration form to jolivette.b.batalon@ph.ey.com. 3. Only those whose payment have been confirmed will be reserved a slot. Early payment is encouraged as slots are limited. For check pick-up arrangements, kindly coordinate with Ms. Yvette Batalon at local Terms and Conditions If you are unable to attend the course, a replacement is welcome to attend in your place. Please inform Ms. Yvette Batalon for any changes by 1 June All other requests for cancellation and refund must be made in writing not later than one week before the seminar to qualify for a refund. You are deemed to have read and understood the terms and conditions upon submitting the registration form. 6 Implementing the new IFRS 9 expected credit loss model for banks

7 SGV Assurance Tax Transactions Advisory About SGV & Co. SGV is the largest professional services firm in the Philippines that provides assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. SGV & Co. is a member firm of Ernst & Young Global Limited. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit SyCip Gorres Velayo & Co. All Rights Reserved. Expiry date: no expiry This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither SGV & Co. nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. 8 Implementing the new IFRS 9 expected credit loss model for banks