Financial Statements Composition and Layouts

Transcription

1 Risk and Accounting Financial Statements Composition and Layouts Marco Venuti 2019

2 Agenda Financial Statements (FS) Objective of Financial Statements Required components of Financial Statements Banks' Financial Statements: Layouts and Preparation Pagina 2

3 Financial Statements (FS) Source of law: IAS 1 (Presentation of Financial Statements) and IAS 7 (Cash Flow Statement) These standards are applicable for all types of entities, including banks and insurance companies. Objective: Ensure comparability between years and entities regarding FS presentation and structure Scope: All financial statements (FS) prepared in accordance with IFRSs: - Consolidated FS - Separate/Individual FS Reporting Period: Financial statements to be presented at least annually 3

4 Objective of Financial Statements Objective: To provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions To meet that objective, financial statements provide information about an entity's: cash flows income and expenses, including gains and losses assets contributions by and distributions to owners liabilities equity 4

5 Required components of Financial Statements Financial statements represent a single, indivisible group of documents A complete set of financial statements should include: 1) Statement of Financial Position at the end of the period (Balance Sheet), 2) Single Statement of Profit or Loss (or Income Statement) and Other Comprehensive Income for the period, 3) Statement of changes in equity for the period, 4) Statement of Cash Flows for the period, and 5) Notes to Financial Statements In each financial statement, a comparative numerical information for the previous period presented must be given. 5

6 Statement of financial position Present assets and liabilities in the statement of financial position as Current / non current; or Broadly in order of liquidity (when reliable and more relevant) An entity must normally present a classified statement of financial position, separating current and noncurrent assets and liabilities As a rule, an asset is classified as current when it is expected to be realised within 12 months after the end of the reporting period. All other assets are noncurrent. As a rule, a liability is classified as current when it is expected to be settled within 12 months after the end of the reporting period. All other liabilities are noncurrent. 6

7 Statement of financial position 7

8 Statement of financial position - ENEL 8

9 Statement of Financial Position 1) property, plant and equipment; 2) investment property; 3) intangible assets; 4) financial assets (excluding amounts shown under 5, 8 and 9); 5) investments accounted for using the equity method; 6) biological assets; 7) inventories; 8) trade and other receivables; 9) cash and cash equivalents; 10) Non current Assets Held for Sale and Discontinued Operations; X May be presented adopting current/non current distintion or liquidity distintion IAS 1

10 Statement of Financial Position 11) trade and other payables; 12) provisions; 13) financial liabilities (excluding amounts shown under 11) and 12)); 14) liabilities and assets for current tax; 15) deferred tax liabilities and deferred tax assets; 16) liabilities included in disposal groups classified as held for sale; 17) issued capital and reserves X May be presented adopting current/non current distintion or liquidity distintion IAS 1

11 Statement of financial position 11

12 Statement of Profit or Loss and other Comprehensive Income Profit or Loss for that period Other Comprehensive Income recognized in that period. Total Comprehensive income for a period

13 Statement of Profit or Loss and other Comprehensive Income Single statement or income statement and a separate statement of comprehensive income (OCI) Expenses are presented by nature (e.g., purchases of materials, transport costs, wages and salaries, advertising costs) or function (expenses are classified according to their function as part of cost of sales, distribution or administrative activities). No extraordinary items Other comprehensive income (OCI) for the period All items of income and expense recognized in a period must be included in profit or loss unless a Standard or an Interpretation requires otherwise. Example is the revaluation surplus (IAS 16 Property, plant and equipment and IAS 38 Intangible asset): Revaluation increases credited before to OCI and then to equity. Indeed the result of OCI is credit to a reserve of equity 13

14 Revenue Statement of Profit or Loss and other Expenses Share of profit of associate Profit before tax Income tax expense Profit from continuing operations Loss from discontinued operations PROFIT FOR THE YEAR Other comprehensive income: Pensions Revaluation OCI before tax Tax relating to OCI OCI after tax TOTAL COMPREHENSIVE INCOME Comprehensive Income X (X) X X (X) X (X) X X (X) X (X) X X May be two separate statements IAS 1

15 Statement of Profit or Loss and OCI - ENEL 15

16 Statement of Profit or Loss and OCI - ENEL 16

17 Cash Flow Statements Cash Flow Statements (information regarding the ability of an entity to generate cash and the timing and certainty of their generation) The cash flow statement is an accounting table that presents positive and negative changes in cash during a specific financial year. Cash flows represent an increase or decrease in the amount of cash. Cash flows presented in the cash flow statement result from operating activities, investing activities and financing activities. Cash is made up of bank and post office deposits, cheques and cash on hand. In the cash flow statement, individual cash flows shall be presented separately in one of the following categories: operating activities (include transactions connected with the purchase, production and distribution of goods and the performance of services); investing activities (include transactions for the purchase and sale of tangible and intangible assets and financial assets); financing activities (include transactions aimed at obtaining and repaying cash in the form of equity or borrowed funds) 17

18 Example of Cash Flow Statements Cash flows from operating activities Cash receipts from customers 71,600 Cash payments to suppliers and employees Net cash from operating activities (A) 7,900 Cash flows from investing activities Cash paid for subsidiary, net of cash acquired 1,200 Proceeds from the sale of property, plant and equipment 1,590 Net cash from investing activities (B) 390 Cash flows from financing activities Share capital issued 1,100 Loans raised 4,500 Loans repaid 6,850 Dividends paid 200 Net cash from financing activities (C) 1,450 Net increase in cash and cash equivalents (A+B+C) 6,840 Cash at beginning of the year 3,600 Cash at end of the year 10,440 18

19 Other documents Statement of changes in equity : (information regarding changing in equity) Notes to FS: (Present information in systematic order and cross reference to statement of financial position, statement of comprehensive income and statement of cash flows. Normally presented in the following order Statement of compliance with IFRSs Bases of measurement and significant accounting policies applied Supporting information required by IFRSs for items presented in the statements Other disclosure Notes present also: Management s judgements in applying accounting policies with significant effects on amounts recognized and Key assumptions concerning the future and key sources of estimation uncertainty. 19

20 Banks' financial statements: layouts and preparation Source of law: IAS/IFRS and administrative provisions issued by the Bank of Italy pursuant to Article 9.1 of Legislative Decree 38/2005 Circular 262 of 22 December 2005 contains these provisions issue by Bank of Italy. It wasn t issued an English version by Bank of Italy. Circular 262 contains the provisions governing, in conformity with IAS/IFRS, the formats of the financial statements (balance sheet, income statement, statement of comprehensive income, statement of changes in shareholders equity and statement of cash flows), the notes to the financial statements and the report on operations that banks (on a solo basis) and banking groups (on a consolidated basis) are required to produce. Last update:

21 Banks' financial statements: layouts and preparation if a presentation based on liquidity provides information that is reliable and more relevant may the current/noncurrent split be omitted Bank present assets and liabilities in the statement of financial position in order of liquidity the current/non current distinction is relevant for entities with a distinctive operating cycle, e.g., manufacturing, trading and most service companies. Other entities, e.g., banks with assets and liabilities that are readily realisable and capable of being settled within a short period of time and are measured at fair values, find a presentation based on liquidity reliable and more relevant Balance sheet, income statement, statement of comprehensive income layouts provided by Bank of Italy are reported in the next slides. This circular is available only in Italian 21

22 Bilancio di esercizio Banche Stato patrimoniale 10 Cassa e disponibilità liquide 20 Attività finanziarie valutate al fair value con impatto a conto economico a) Attività finanziarie detenute per la negoziazione b) Attività finanziarie valutate al fair value c) Attività finanziarie valutate obbligatoriamente al fair value 30. Attività finanziarie valutate al fair value con impatto sulla redditività complessiva 40. Attività finanziarie valutate al costo ammortizzato a) Crediti verso banche b) Crediti verso la clientela 50. Derivati di copertura 60. Adeguamento di valore delle attività finanziarie oggetto di copertura generica (+/-) 70. Partecipazioni 80. Attività materiali 90. Attività immateriali di cui: avviamento 100. Attività fiscali a) Correnti b) anticipate 110. Attività non correnti e gruppi di attività in via di dismissione 120. Altre attività Totale attivo 10. Passività finanziarie valutate al costo ammortizzato a) Debiti verso banche b) Debiti verso clientela c) Titoli in circolazione 20. Passività finanziarie di negoziazione 30. Passività finanziarie designate al fair value 40. Derivati di copertura 50. Adeguamento di valore delle passività finanziarie oggetto di copertura generica (+/-) 60. Passività fiscali a) Correnti b) anticipate 70. Passività associate ad attività in via di dismissione 80. Altre passività 90. Trattamento di fine rapporto del personale 100. Fondi per rischi ed oneri a) Impegni e garanzie rilasciate b) quiescenza e obblighi simili c) altri fondi 110. Riserve da valutazione 120. Azioni rimborsabili 130. Strumenti di capitale 140. Riserve 150. Sovrapprezzi di emissione 160. Capitale 170. Azioni proprie (-) 180. Utile (perdita) d'esercizio Totale passivo e netto 22

23 Banca Intesa (Half yearly report) 23

24 Banca Intesa (Half yearly report) 24

25 Conto economico (del bilancio di esercizio) 10. Interessi attivi e proventi assimilati 20. Interessi passivi e oneri assimilati 30. Margine di interesse 40. Commissioni attive 50. Commissioni passive 60. Commissioni nette 70. Dividendi e proventi simili 80. Risultato netto dell'attività di negoziazione 90. Risultato netto dell'attività di copertura 100. Utile / perdita da cessione o riacquisto di AF valutate al costo ammortizzato, di AF valutate al FV con impatto sulla redditività complessiva e passività finanziarie 110. Risultato netto delle attività e passività finanziarie valutate al fair value 120. Margine di intermediazione 130. Rettifiche/Riprese di valore nette per rischio di credito di AF valtuate al costo ammortizzato e AF valutate al FV con impatto sulla redditività complessiva 140 Utili/perdite da modifiche contrattuali senza cancellazione 150. Risultato netto della gestione finanziaria 25

26 Conto economico 160. Spese amministrative 170. Accantonamenti netti ai fondi per rischi e oneri 180. Rettifiche/Riprese di valore nette su attività materiali 190. Rettifiche/Riprese di valore nette su attività immateriali 200. Altri oneri/proventi di gestione 210. Costi operativi 220. Utili (Perdite) delle partecipazioni 230. Risultato netto della valutazione al fair value delle attività materiali e immateriali 240. Rettifiche di valore dell'avviamento 250. Utili (Perdite) da cessione di investimenti 260. Utile (Perdita) della operatività corrente al lordo delle imposte 270. Imposte sul reddito dell'esercizio dell'operatività corrente 280. Utile (Perdita) della operatività corrente al netto delle imposte 290. Utile (Perdita) dei gruppi di attività in via di dismissione al netto delle imposte 300. Utile (perdita) d'esercizio 26

27 Banca Intesa (Half yearly report) 27

28 Banca Intesa (Half yearly report) 28

29 Prospetto della redditività complessiva 29

30 Banca Intesa (Half yearly report) 30

31 Notes to FS: Risk Reports In the Notes to FS is required by Bank of Italy that Banks include information on Risks and relative hedging policies (part E of the Notes) In this part of the Notes, Banks provide information on: Section 1 Risks of the banking group Credit RiskMarket Risk - interest rate risk, - currency risk, - credit and Financial derivatives Liquidity Risk Operational Risk Section 2 Risks of Insurance Companies 2.2 Financial Risks 2.3 Other Risks Section 3 Risks of other companies 31