Impairments under IFRS 9
IFRS 9 defines new requirements on accounting for financial instruments. The requirements are changing selected parts of the original standard IAS 39. The IFRS 9 introduces a number of changes and new duties, especially for banks, as (apart from other changes) it changes the process of recognition of credit losses.
Advanced Risk Management, s.r.o., has a long term experience with the area of credit risk that is closely related to impairments. ARM would like to offer you its services regarding:
ARM offers
seminars in the area of IFRS 9 and credit risk in the form of open, as well as in-house seminars.
Database
- specification of requirements for data collection and database
- verification of the data preparation process
- control of the accuracy and relevance of the database
- data cleaning
- analysis of the bank's client portfolio
- extracting of usable information
Methodology for impairments calculation
- classification of exposures and creation of rules for the assignment of exposures to stages 1, 2, 3
- utilization of existing models
- creation of models for calculation of PD and LGD, or a model based on so called “loss rates“
- calculation of ECL in a horizon of 12 months by using the Loss Rate Method or the PD/LGD Method
- calculation of ECL in a lifetime horizon
- consideration of future development in the terms of impairments calculation (forward-looking approach)
Implementation of IFRS 9
- estimation of the impact of IFRS 9 implementation on the bank’s financial position and capital adequacy
- definition of roles and responsibilities
- proposal of the internal reporting process including the structure of reported information
- creation of model validation rules