EBA欧洲银行-GL06Finrep122006_18页_397kb

Summary of GUIDELINES FOR THE IMPLEMENTATION OF THE FRAMEWORK FOR CONSOLIDATED FINANCIAL REPORTING (FINREP)

Core Content

The Guidelines for the Implementation of the Framework for Consolidated Financial Reporting (FINREP) provide a standardised reporting framework for credit institutions to prepare their consolidated supervisory financial returns in accordance with IAS/IFRS. The framework aims to increase comparability and transparency of financial information across European credit institutions, while also aligning with the Common Framework for Reporting of the Solvency Ratio (COREP). It does not constitute an interpretation of IAS/IFRS but serves as a guide for implementation.

Main Points

1. Accounting and Measurement Rules

• FINREP is based on IAS/IFRS as published by the IASB in 2005.
• The European Commission has endorsed these standards, with two exceptions: the fair value option and hedge accounting.
• The framework also incorporates certain elements from IFRS 7 and supersedes some of the disclosure requirements from IAS 30 and IAS 32.

2. Scope of Application

• FINREP applies to credit institutions when preparing their consolidated supervisory financial returns under IAS/IFRS.
• The scope of consolidation can be defined either by IAS/IFRS or by the Capital Requirements Directive (CRD), depending on the national supervisory authority's requirements.
• Table 39 provides information on the companies included in consolidation and changes in the consolidation scope during the reporting period.

3. Structure of the Financial Reporting Framework

• FINREP is structured into core and non-core information.
• Core information includes:
  • Consolidated Balance Sheet (Assets, Liabilities, Equity and Minority Interest)
  • Consolidated Income Statement (Income and expenses from continuing and discontinued operations)
• Non-core information includes additional details that contribute to standardisation and comparability across European supervisory authorities.
• Tables provide detailed breakdowns of core information, including exposure to credit risks, revaluation reserves, interest income and expenses, and derivatives.

4. Accounting Conventions

• Trade date vs. Settlement date: Financial assets may be recognised on either the trade date or the settlement date, depending on the category and subject to consistent application.
• Accrued Interest and Interest Rate Margin: FINREP allows reporting using either clean or dirty pricing conventions. Accrued interest is included in the relevant financial instruments in the balance sheet, and interest income/expense may be reported either as part of interest income/expense or under net gains (losses) in the income statement. Supervisory authorities may require standardised reporting of accrued interest income and expenses.

5. Links to COREP

• FINREP includes specific requirements to align with COREP, such as:
  • Breakdown of revaluation reserves for own funds calculation
  • Use of economic sector allocation classes (see Annex 1)
  • Product breakdowns for credit losses and other financial instruments

6. Reporting Frequency

• Reporting frequency is determined at the national level by supervisory authorities.
• Different frequencies may apply to core and non-core information, depending on the requirements of the supervisory authority.

Detailed Guidance

1. Deposits from Credit Institutions

• Deposits from credit institutions are included in the consolidated balance sheet and related detailed tables.
• The term "credit institution" refers to the legal definition under local legislation.
• Deposits from other counterparties (e.g., corporates, private customers) are categorised separately.

2. Equity Component of Financial Instruments

• The equity component of financial instruments is included in the "Other equity" section of the consolidated balance sheet.
• This includes all contractual obligations that may result in the future delivery of own equity instruments, such as derivatives and compound financial instruments.

3. Treasury Shares

• Treasury shares are included in the equity and minority interest section of the consolidated balance sheet.
• These are own equity instruments reacquired by the issuing entity.

4. Interest Income and Expenses

• Interest income and expenses from financial instruments held for trading or designated at fair value through profit or loss may be reported under clean pricing (as interest income/expense) or dirty pricing (as part of net gains/losses).

5. Impairment on Equity Instruments

• Impairment losses on equity instruments in the available-for-sale category, carried at cost, are reported in the item "Impairment on financial assets at cost (unquoted equity)".
• Impairment is calculated in accordance with IAS 39.66.

6. Dividend Income

• Dividend income may be reported either as part of dividend income (clean pricing) or under gains/losses (dirty pricing).
• Supervisory authorities may require separate reporting of dividend income.

7. Provisions

• Provisions are reported in a separate line item in the consolidated income statement.
• They may be allocated by nature or function, depending on the supervisory authority's requirements.

8. Derivatives

• Derivatives are reported in tables 3 and 8, broken down by underlying risk.
• If a derivative is influenced by multiple underlying risks, it should be allocated to the most risk-sensitive category.
• Derivatives that are not effective hedges are always included in the held-for-trading category.
• The notional amount reported is based on the strike price of the option, multiplied by the number of underlying instruments.

9. Available-for-Sale Financial Assets

• Table 5 provides a product breakdown of AFS financial assets, including fair value and impairment losses.
• The fair value change is split into unimpaired and impaired components, with impairment losses transferred to the income statement.

10. Loans and Receivables; Held-to-Maturity Investments

• Table 6 allows for the assessment of the quality of these assets by breaking them into unimpaired and impaired categories.
• Allowances for individually and collectively assessed financial assets are disclosed separately.

11. Impairment and Past Due Assets

• Table 7 requires an analysis of the age of past due assets that are not yet impaired.
• Past due assets are broken down by the number of days past due.
• Impaired assets are reported separately from past due assets.

12. Tangible and Intangible Assets

• Tables 9, 10, and 11 provide harmonised reporting of property, plant and equipment; investment property; and goodwill and intangible assets.
• Credit institutions may choose between the revaluation model or the cost model for measurement.

13. Investments in Associates, Subsidiaries and Joint Ventures

• Table 12 provides summarised financial information on these investments, using either the equity or non-equity method.
• Sub-table B includes financial information on subsidiaries not consolidated due to prudential scope.

14. Derecognition and Financial Liabilities

• Table 17 reports transferred financial assets that do not qualify for derecognition.
• It also includes information on financial liabilities associated with these transfers for capital purposes.

15. Realised Gains and Losses

• Table 21 provides a breakdown of realised gains and losses on financial assets and liabilities not measured at fair value through profit or loss.
• These gains and losses arise at derecognition.

16. Repurchase and Reverse Repurchase Agreements

• These agreements are not presented separately on the balance sheet but are detailed in tables 33 and its sub-tables.
• Table A reports financial assets transferred under repos and still recognised in the balance sheet.
• Table B reports liabilities from financing received under repos.
• Table C reports financial liabilities upon selling collateral from reverse repos.
• Table D provides a breakdown of financing given under reverse repos by counterparty.

Annex 1: Economic Sector Allocation Classes

• The economic sector allocation in FINREP aligns with the exposure classes in the CRD and COREP.
• There is not a complete match between the two frameworks due to differing purposes and approaches.
• The tables in Annex 1 assist credit institutions in classifying financial instruments in the FINREP framework.

Key Information

• Core vs. Non-core: Core is mandatory, non-core is optional and used for standardisation and comparability.
• Standardisation: FINREP limits some IAS/IFRS presentational options to ensure consistency.
• Alignment with COREP: Several tables are designed to link data with COREP for prudential reporting.
• Flexibility: Credit institutions may choose between clean and dirty pricing for interest and dividend income, unless required by national supervisory authorities.
• IT Alignment: Annex 1 provides guidance for credit institutions to align their IT systems with FINREP's economic sector classification.