In our earlier publication, ‘IFRS 9 for banks - Illustrative disclosures’ published in February 2017, we set out illustrative disclosures for a fictional medium sized bank in its 2018 annual financial statements. Similarly, where banks’ IFRS 9 implementation projects include a disclosure workstream most, if not all, of the focus to date has naturally been on the comprehensive disclosures to be included in the first annual financial statements under IFRS 9. For banks with a calendar year-end that do not early adopt IFRS 9, these financial statements will be for the year-ended 31 December 2018.
However, before issuing these annual financial statements, many banks will issue interim financial statements under IAS 34. Some banks are also planning to issue a separate Transition document, outside of any annual or interim financial statements, to help users better understand the IFRS 9 financial statements they will subsequently receive and the impacts at, and beyond, adoption.
Whilst IFRS 9 poses huge implementation challenges in many other areas, it is important that this 2018 pre-year-end reporting is also given appropriate attention.
Given the limited quantitative disclosures made by most banks prior to the year of adoption, this reporting is likely to receive a lot of focus from investors, regulators and other key stakeholders. It will therefore be important that banks clearly communicate key messages in this reporting to help users understand the new world of IFRS 9. Banks will also want to avoid inconsistencies with what is published later in the first annual financial statements applying IFRS 9.
This publication is designed to help banks navigate through the various considerations that may be relevant in designing this 2018 pre-year end reporting.