2015 FINANCIAL INSTITUTIONS ACCOUNTING & REPORTING

Transcription

1 9:00 a.m. - 9:05 a.m. Opening Remarks from the Chair 2015 FINANCIAL INSTITUTIONS ACCOUNTING & REPORTING UP-TO-DATE DEVELOPMENTS FOR IFRS AND REGULATORY REPORTING June 9-11, 2015 Toronto Conference Agenda Program - June 9 Love Mital, Vice President, Global Banking & Markets Financial Reporting and Chief Accountant, ScotiaBank 9:05 a.m. 10:10 a.m. Regulatory and Accounting Update: How Recent Regulatory Developments Impact Financial Accounting and Reporting Dilshad Hassen, Partner, KPMG LLP Elizabeth Murphy, Partner, KPMG LLP An update on current regulatory developments affecting financial services providers will examine recent developments together with a discussion on any related financial accounting and reporting considerations. Topics would include: -Liquidity Coverage Ratio/Net Stable Funding Ratio -Leverage Ratio -Life/PC Capital Frameworks and IAIS BCR proposed standard -OSFI Mortgage insurance rules -OSFI Guideline on Derivative Sound Practices -longevity risk -proposed bail-in regime 10:10 a.m. 11:00 a.m. Practical Perspectives on Adopting IFRS 9 from Scotiabank Diana Kurvers, Director, Derivative Hedge Qualification, Scotiabank With the Jan 1, 2018 adoption date, you should be thinking of everything that needs to be put in place to fully implement the new accounting standard. Here are some of the questions this session will address: How does Classification & Measurement apply to my business? -how do I determine my Business Model? -what is considered SPPI? -what will happen to my Equity Portfolio? What changes do I need to make for the new Impairment rules? -how do I apply 12 Month ECL vs. Lifetime ECL? -what triggers the movement between stages?

2 What is the impact of the changes in hedging? -do I need to discontinue my Macro-Hedging? -will my existing hedges still qualify? -what will I do if I can t de-designate? -how can I apply Hypotheticals to all my hedges? 11:00 a.m. 11:15 a.m. Morning Networking Break 11:15 a.m. 12:15 p.m. Accounting Issues For Financial Instruments Classification, Measurement and Hedge Accounting George Prieksaitis, Partner, Ernst & Young LLP, Global Member of the IASB Impairment Transition Resource Group Omar Halloum, Senior Manager, Ernst & Young LLP IFRS 9 classification and measurement requirements -what s the starting point? Fair value through other comprehensive income (FV-OCI) category for debt instruments -how does that differ from the AFS category in IAS 39? How to assess the Business Model test -is it simply a mapping exercise? -how many sub portfolios can the entity identify? -judgments: infrequent, insignificant, integral, incidental How to understand the differences between Amortized Cost, FV-OCI and FV How to apply Solely Payments of Principal and Interest (SPPI) test -judgments: de-minimis, non-genuine, significantly different -features ignored today but could cause a different classification under IAS 39 -prepayment and extension features. -contractually linked instruments -non-recourse loans Interaction of FVOCI measurement requirements with new impairment model Recognition of fair value changes for equity instruments -implications of financial asset classification where regulatory capital and resources are based on IFRS financial statements Profit or loss and equity implications Transition 12:15 p.m. 1:30 p.m. - Luncheon 1:30 p.m. 2:30 p.m. Impairment of Financial Instruments Katie McGarry, Senior Manager, KPMG LLP Dave Warren, Senior Manager, KPMG LLP Current issues of note in financial instrument impairment for IFRS compliance Impairment under IFRS 9 Credit deterioration and categories of impairment The expected-loss approach vs. the incurred loss approach Estimating cash flows over the life of an instrument Establishing an effective interest rate Dealing with acquired portfolios Practical considerations for working with the three-bucket model Identifying the operational requirements associated with the expected-loss approach Issues in calculating expected future losses

3 Allocation of lifetime expected losses Separate calculation of effective interest rate and expected loss estimate 2:30 p.m. 3:30 p.m. OSFI Perspectives on High Quality Implementation for Expected Credit Losses and OSFI s IFRS 9 Project Plan Ruby Garg, Director, Accounting Policy Division, OSFI Canada The importance of accounting standards to OSFI Overview of OSFI s IFRS 9 Project Plan OSFI s perspectives on high quality implementation for Expected Credit Losses -OSFI s role in developing international supervisory guidance -objectives of international supervisory guidance -scope of application -key elements -high quality and robust implementation of ECL accounting standards -application of forward-looking information and macro-economic factors -individual and collective assessments of ECL -use of Practical Expedients -next steps 3:30 p.m. 3:45 p.m. Afternoon Networking Break 3:45 p.m. 4:45 p.m. IFRS 4, Phase II: Ongoing Changes and Interaction with IFRS 9 Leigh Chalmers, Partner, PricewaterhouseCoopers LLP Owen Thomas, Senior Manager, PricewaterhouseCoopers LLP Update on the IASB re-deliberations for IFRS 4 Phase II Exposure Draft and expectations for the final standard How the measurement model would work for life and P&C insurers, and how it would differ from current reporting of income and financial position Understanding potential impacts on earnings patterns and volatility measurement Interaction with IFRS 9 and other regulatory changes 9:00 a.m. 9:05 a.m. Opening Remarks from the Chair Program - June 10 Love Mital, Vice President, Global Banking & Markets Financial Reporting and Chief Accountant, ScotiaBank 9:05 a.m. 10:30 a.m. Revenue From Contracts With Customers - the New Revenue Recognition Standard Shannon O Mahony, Associate Partner, Ernst & Young LLP Patrick Cavanagh, Senior Manager, Ernst & Young LLP IFRS 15 specifies the accounting treatment for all revenue arising from contracts with customers. It affects all entities that enter into contracts to provide goods or services to their customers unless the contracts are in the scope of other IFRS requirements, (such as IAS 39 Financial Instruments: Recognition and Measurement). This does not mean that financial institutions will not be impacted.

4 Join us for an overview of the new revenue recognition model and a discussion on how the new standard could affect your organization. 10:30 a.m. 10:45 a.m. Morning Networking Break 10:45 a.m. 12:30 p.m. IFRS 9 Transition Planning & Current Hot Topics Classification and Measurement, Hedge Accounting, Impairment George Prieksaitis, Partner, Ernst & Young LLP, Global Member of the IASB Impairment Transition Resource Group Highlights of discussions from latest ITG meeting Discussion about Basel Committee Consultative Paper on Guidance on accounting for expected credit losses Current challenges in modelling expected lifetime losses Hedge accounting implementation and transition questions Case studies in classification & measurement implementation issues IFRS 9 implementation plans are you in the right place? 12:30 p.m. 1:30 p.m. Luncheon 1:30 p.m. 2:30 p.m. Operationalizing ORSA Elaine Hultzer, Partner, Deloitte LLP Sati MacLean, Senior P&C Actuarial Manager, Deloitte LLP Insurers have reported on their ORSA processes in their first 2014 ORSA Report. Implementation of ORSA is a journey as opposed to a once off exercise. Many insurers have not yet embedded ORSA into the organization and do not use the internal capital targets in the business. The need to identify, measure, manage and quantify capital to be held in respect of operational risk, is for many insurers, new territory. Deloitte will discuss some practicalities of operationalizing ORSA, with speakers who have been involved in the practical aspects or ORSA in the organization. The Deloitte speakers will address: ORSA, ERM and the day to day management of risk Operational risk and capita management The use of ORSA capital metrics in the business 2:30 p.m. 3:30 p.m. Basel III Capital Calculations Impact of IFRS 9 Marc Buklis, Managing Director, PricewaterhouseCoopers LLP Overview of IFRS 9 impacts on Basel III data, systems and technology infrastructure: -critical Data Elements -impairment classification and loss calculation -disclosure and reporting How does the impact differ for smaller vs. larger institutions? Anticipated impact on regulatory capital parameters and results: -PD and EAD -EL Impact on Capital -global perspective -impact on different product groups Anticipated changes to Pillar 3 disclosures

5 Optional Post-Conference Workshop IFRS 9 - Impairment Accounting Workshop Leaders: Technical and Practical Issues for Transition to IFRS 9 Program June 11 9:00 a.m. 12:30 p.m. (There will be a 15 minute break mid-morning) Katie McGarry, Senior Manager, KPMG LLP Dave Warren, Senior Manager, KPMG LLP IFRS 9 Loan Loss Allowances: An Overview Overview of IFRS 9 expected loss model Key differences between IAS 39 and IFRS 9 loan loss models FASB and IASB convergence and divergence Interaction with regulatory capital Understanding the Application of Expected Losses Model Scope 12 month vs. lifetime expected losses Significant increase in credit risk Forecasting expected losses Accounting for changes in expected losses Credit impaired assets Credit commitments Modifications and write offs Disclosures Practical Considerations for Transition and Application Defining suitable models for expected loss and expected lifetime loss assessment Portfolio vs. loan-by-loan measurement Retail portfolios Categorization, credit quality indicators and threshold values for the two bucket approach Monitoring changes in credit quality and allocation within two bucket model Reconciliation of impairment results with internal and regulatory credit risk measurement results Adapting delivery and reporting processes new issues for disclosure Data management and IT issues for impairment calculations Operational Considerations Looking Beyond Accounting Concerns Implications for regulatory reporting Risk management implications Governance issues Gap analysis and feasibility studies Tax considerations Staffing, skills development, supervision