Search

Image Gallery

03 Targens Consulting 160919 targens rgb 72dpi web 04

FINREP COREP - Implementing Technical Standards

Print

Financial Reporting (FINREP) and Common Reporting (COREP) are the requirements for drafting the Implementing Technical Standards (ITS) of the European Banking Authority (EBA) of 20 December 2011. FINREP and COREP serve the supervision of the regulatory part of CRD IV, which comes into effect on 1 January 2013. The ITS up to now has contained rules relating to article 95 (equity capital and financial information) and article 96 (losses from credit secured by real estate) of the Capital Requirements Regulation (CRR). Rules on major credit are to follow. The first report should be issued on 13 April 2013 for the first quarter 2013.

The CRD IV scope of consolidation

in the ITS draft will state that financial data must be prepared based on the supervisory scope of consolidation. The move is being made in a top-down process from a commercial to a supervisory scope of consolidation. In this move, various positions are being deconsolidated that do not correspond to the scope of consolidation and positions have been consolidated in that must be considered in a supervisory capacity.

Ascertainment of the foreign exposure

Exposure from credit risks and counterparty credit risks must be resolved according to the countries if the bank’s IRBA foreign exposure is greater than 10% of overall exposure. If this value is reached, all countries with an exposure exceeding 0.5% must prepare reports based on annexe I, part 3.3 and annexe II, part II, 3.3.4 of the ITS. The limits are ascertained individually for each exposure class. The same limits apply to financial data.

XBRL Taxonomy and uniform data model

In order to facilitate the evaluation of COREP and FINREP data on the part of the EBA, it prefers reports to be submitted based on a uniform data model provided by the EBA and the use of XBRL taxonomies. The use of XBRL as a data exchange format is still not however compulsory.

Summary and outlook

The stated changes are part of the challenge that banks must face in implementing FINREP and COREP within the context of the ITS. The main task in the implementation is in the matching of required reporting content and data produced in the bank. If the exception regarding the institute’s group reporting on a Civil Code basis prevails until 2015 in accordance with article 64h of the Banking Act, the change from accounting principles to IFRS will be required in the future. The move from IAS 39 to IFRS 9 is also leading to a change of the FINREP reporting content. It is based on these interdependencies that more emphasis is required on efficient and prompt provision of reporting content.

Do you require support in implementing FINREP and COREP? Just ask us – we are looking forward to talking to you. 

 

targens GmbH - Calwer StraÃ??e 33 - 70173 Stuttgart
Phone: +49 711 222 992-900 - Fax: +49 711 222 992-999