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Basel III und MaRisk

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Neue Regularien, Methodische Neuadjustierung und IT-Umsetzung:
Neue Anforderungen von Basel III und MaRisk

RISIKO MANAGER, Dez. 2011

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Institut group reporting based on IFRS

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The changeover of the institut group reporting based on IFRS has become mandatory since the entry into force of the 7th Banking Act amendment in 2007, for banks with IFRS consolidated financial statements. The derogation rule exemption paragraph 64h section 4 of the Banking Act allows for a transitional period for the changeover of the institut group reporting until the end of 2015. However, there is the possibility that the introduction of the CRD IV will trigger an early changeover of the institut group reporting to IFRS values. Significant efforts will arise for banks through the changeover, which particularly include

  • Adaptation of the scope of consolidation
  • Adaptation of the risk exposures
  • Determination of own capital resources based on IFRS.

Scope of consolidation of the institut group reporting

Only the prudential scope of consolidation is relevant for the creation of the institut group reporting, thus requiring an adjustment of the commercial law respective scope of consolidation. Generally, the commercial law respective scope of consolidation is spaced out broader than the prudential scope of consolidation, requiring that holdings must be deconsolidated in a top-down process. To a lesser degree supplemental consolidations may also be relevant.

Transition to consolidation techniques 

After the scope of consolidation of the institut group reporting was determined, a transition of the consolidation techniques must be carried out. The full consolidation, proportional consolidation, at equity valuation and the valuation as a financial instrument (IAS 39) on the side of the commercial law respective consolidation are adjacent to the full consolidation, proportionate consolidation and equity withdrawal on the side of the prudential law.

Special attention must be given to holdings, which will be evaluated at equity, since in case of a consolidation a transition of the consolidation techniques must be carried out and in the event of a deconsolidation the therein contained differential amounts between the carrying book value and the initial cost must be considered (§ 7 KonÜV).

Risk exposures

One of the biggest challenges for banks during the changeover of the institut group reporting is the handling of risk exposures. It must be assumed that a large amount of IFRS single transaction data for holdings is not available in the reporting. As a result, a complex bottom-up process must be applied. Particular attention must be paid to the divergent rules for counterparty risks, regarding the balance sheet capacity of risk assets, the treatment of capital surpluses and the effects of hedge accounting. The different evaluation of allowances for losses in the commercial and regulatory law must also be taken into account.

Determining the own capital resources and prudential filters

Prudential filters and the different evaluation principles of prudential and commercial law state that not all the commercial law relevant equity components are allowed to be accepted. On the one hand a different assessment of retained earnings must be taken into account, on the other hand, the net earnings could contain components which are not allowed to be recognized as core capital according to the Banking Act. These are, for example, income statement-related valuation gains that exceed the initial cost of the balance sheet assets. Additionally, prudential filters (§ 2-6 KonÜV) must be applied, which were devised by the CEBS (Comittee of European Banking Supervisors) and the Basel Committee, for the purpose of enabling an international comparability and the stabilization of the own capital resources. 

Outlook on the institut group reporting based on IFRS

The changeover of the institut group reporting is, in addition to the major projects Basel III/IV CRD and IFRS 9, one of the major issues with which banks will be faced in the coming years. In addition, the introduction of the institut group reporting based on IFRS will increase the volatility of the own capital resources, which will have an impact on the business policy of the respective banks.

You are looking for an experienced partner who can competently and reliably support you during the changeover of the institut group reporting based on IFRS.
The put us to the test - we will gladly discuss the topic with you personally at your discretion!

The institut group reporting based on IFRS, places extensive demands on the availability of data in the reporting - in this context you can also gain further information about our solution offers, data in the reporting and optimization of data flows .

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Phone: +49 711 222 992-900 - Fax: +49 711 222 992-999