IFRS 9 - how to make the changes needed

The changes needed to meet the new IFRS 9 requirements are substantial and will require significant thought and effort by individual organisations and their advisors to develop a compliant solution that is right for them. Some larger, more complex and systemically significant organisations have been working on this for a number of years and still don’t have all of the answers, so it is important to determine appropriate timescales for your organisation.

The process generally consists of four components:

  • A design phase, confirming scope, performing a gap analysis against current capability and the IFRS 9 standard. A methodology covering all the key elements of IFRS 9 and an appropriate approach for the organisation, considering the range of products and materiality and any supporting analysis. A design, which utilises these findings and relates them back to actual data repositories within the organisation, together with proposed solutions.
  • A build phase, delivering to the design but sense checking along the way to ensure that components explained in the design perform as expected when developed in full. An engine build to tie all the elements together and perform checks and balances to ensure robust calculation.
  • A testing phase, developing scripts to test against, performing those checks on individual components and the solution overall and supporting UAT. This would be done just prior to parallel run.
  • A reporting phase based on all reports built based on design specifications and learning from parallel run.