The Bank Statement is KPMG’s quarterly banking newsletter.

It provides updates on IFRS developments that directly impact banks, and considers the potential accounting implications of regulatory requirements.

Download Issue 20 to read about the developments in Q4 2015. Previous issues can be found on our IFRS Newsletters web page.

And visit our IFRS for Banks and IFRS – Financial instruments hot topics pages for more on these and other related developments.

Implementing the classification and measurement requirements of IFRS 9 brings with it its own complexities, but also defines the scope of the impairment part of the project.

In our experience, many banks have underestimated the effort needed to perform the analysis of whether contractual cash flows from financial assets represent solely payments of principal and interest on the principal amount outstanding.

“Many banks started their IFRS 9 implementation projects by focusing on specific accounting issues known to be challenging, and did not focus sufficiently on the broader impact of adopting the standard.”

Gerd Straub and Gudrun Hartig, KPMG in Germany

This quarter’s newsletter looks at some of the practical issues arising in the field.

Disclosures required under Pillar 3 of the Basel Framework cover much common ground with the requirements of IFRS 7 Financial Instruments: Disclosures.

With the implementation of IFRS 9 and the revised requirements under Pillar 3, both sets of rules are changing. We discuss the issues and likely next steps.

Also in this issue, we report on:

• the IFRS Transition Resource Group for Impairment of Financial Instruments’ last scheduled meeting; and
• updates on the IASB’s projects, including the new leases standard and financial instruments with characteristics of equity.