In line with the impending changes to accounting rules via IFRS 9 Financial instruments standard in the EU, it’s been announced that the European Banking Authority (EBA) is launching an impact assessment of the standard on a sample of approximately 50 institutions across the EU.
This exercise, which is not linked to the adoption process of the standard taking place at the legislative level, will help the EBA understand the estimated impact of IFRS 9 on regulatory own funds. In addition, it will support the EBA in assessing the interaction between IFRS 9 and other prudential requirements and the way institutions are preparing to implement the changes.
The EBA acknowledges that institutions are in the process of developing the necessary processes, models and capabilities for the implementation of the new standard and that the quality of the information provided in this exercise is to be improved in the future. As such, the exercise will be repeated over time, especially when closer to the implementation date of the IFRS 9.