Target audience
- At banks and other financial institutions mainly employees at following departments: accounting, reporting, risk management, treasury, ALM, controlling, internal audit, financial analyses of IFRS statements of customers
- At non-financial companies mainly employees at following departments: accounting, reporting, risk management, controlling, internal audit
- Audit firms
- Supervisors and enforcers in the area of financial institutions accounting
Obsah školenia: IFRS 9 – Impairment of financial instruments
- Scope of impairment requirements
- General overview of the requirements – depiction of 3 stages
- Criterion of significant increase in credit risk + detailed description of assessment principles, individual vs collective assessment and practical expedients
- Requirements for measurement of 12-month and lifetime expected losses + explanation of models commonly used in practice
- Application to off-balance sheet exposures – loan commitments and financial guarantees
- Specific requirements for revolving credit facilities
- Forward looking adjustments of expected credit losses
- Credit impaired financial assets - Stage 3
- Modifications of cash flows (restructurings)
- Application to financial assets measured at fair value through OCI
- Accounting for reclassifications and related changes in impairment
- Exceptions from the general model – recognition of lifetime expected losses from inception for specific types of assets,
- Special requirements for purchased or originated credit impaired (POCI) assets and interactions with derecognition requirements
- Requirements for presentation in the financial statements
- Detailed requirements for disclosures of expected credit losses including disclosure examples
- Outcomes of discussions by ITG (Impairment Transition Resource Group) organised by the IASB
- Practical application issues – calculation of PDs, LGDs, EADs, discount factors, adjustments of values used for regulatory purposes, derivation of long-term PDs based on short-term period observations + calculation examples
Discussion of implementation issues
After completing the training the participants will understand
- assessment of significant increases of credit risk which distinguishes whether the impairment is measured based on 12-month or lifetime expected credit losses
- measurement of the expected credit losses including models commonly used in practice
- special areas of impairment requirements such as POCI, modification of financial assets including leeway to affect the extent of POCI in the balance sheet – specific rules applicable to revolving facilities
- disclosures of credit risk for financial instruments based on practical examples
