The Bank Statement – Q4 2014 | KPMG | GLOBAL

The Bank Statement – Q4 2014

The Bank Statement – Q4 2014

This newsletter looks at IFRS and regulatory matters affecting accounting for banks.


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KPMG IFRS Newsletter: Banking (The Bank Statement) cover image: night-time scene by a river in a city financial district

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 16 to read about the developments in Q4 2014. 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.

Macro hedging

The comment period for the IASB’s proposals on macro hedge accounting ended in October.

Feedback on last year's discussion paper expresses concern that the IASB has gone beyond the objective of hedge accounting in the new financial instruments standard (IFRS 9). 

There have been calls for a solution that will reflect risk mitigation through a flexible and voluntary hedge accounting model. 

This quarter, we review the feedback and consider the Board’s possible next steps.

Impairment – Impact of IFRS 9 on banks’ regulatory capital

We also look at how IFRS 9’s expected credit losses model could impact regulatory capital. 

The size of the impact on a bank’s regulatory capital ratios is likely to be impacted by the approach the bank uses to calculate credit risk capital requirements. 

Further changes to regulatory requirements in response to IFRS 9 may also impact regulatory capital.

Distinction between liabilities and equity

Having finalised its new financial instruments standard earlier this year, the IASB has turned its focus to a long-running source of debate: the distinction between liabilities and equity.

As a result, in its October meeting the Board agreed to start work on its project on financial instruments with characteristics of equity, which may result in a discussion paper.

Disclosures about unconsolidated structured entities

How do you compare? We look at certain disclosures under IFRS 12 Disclosure of Interests in Other Entities in the consolidated financial statements of 10 banks reporting under IFRS.

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