Banks (IFRS 9; 2015)

192 Pages·2016·15.61 MB·English

IFRS
Guide to annual
fnancial
statements: IFRS 9
– Illustrative
disclosures
for banks
OCI
STATEMENT
SUBSIDIARY
March 2016 IFRS
DISPOSAL
ASSETS EQUITY
kpmg.com/ifrs FAIRVALUE OPERATING SEGMENTS
PRESENTATION NON-CONTROLLING INTERESTS
ESTIMATES PROVISIONS
FINANCIAL RISK MANAGEMENT
LEASES
OFFSETTING JUDGEMENT
ACCOUNTING POLICIES
SHARE-BASED PAYMENT PERFORMANCE
CARRYING AMOUNT TRANSACTIONS
FINANCIAL INSTRUMENTS
UPDATE SHARE-BASED PAYMENT ACCOUNTING POLICIES
L OA N S B O R R O W I N G S FINANCIAL POSITION CASH FLOWS
IMPAIRMENT FAIR PRESENTATION
FUNCTIONAL CURRENCY
PENSION PROFIT OR LOSS IFRS
ASSUMPTIONS
DEPOSITS BANKS
FINANCIAL RISK MANAGEMENT D E R I VAT I V E S
PRESENTATION G R O U P
CONSOLIDATION IFRS
FAIRVALUE IFRS 9NOTES
BUSINESS COMBINATIONS FAIR VALUE MEASUREMENT
CASH EQUIVALENTS LOANS AND ADVANCES ACCOUNTING POLICIES
CONTINGENCY RELATED PARTY
DERIVATIVES
DEPOSITS FROM BANKS
STRUCTURED ENTITY
GOING CONCERNPERFORMANCE MATERIALITY
DEBT PROFIT OR LOSS OFFSETTING
INVENTORIES
TRADING ASSETS
CAPITAL COMPARATIVE VALUATION UPDATE
ASSETS MATERIALITY
CGU FAIRVALUE
NCI PENSION
PERFORMANCE
BUSINESS COMBINATIONS
OPERATING SEGMENTS
GOODWILL ESTIMATES OFFSETTING OCI
CASH FLOWS PROFIT OR LOSS
LIABILITIES CONSOLIDATION
GOING CONCERN
UNCONSOLIDATED STRUCTURED ENTITIES FINANCIAL POSITION PRESENTATION
DISCLOSURES
SIGNIFICANT PROPERTY ACQUISITION ASSUMPTIONS COMPARATIVE EQUITY
FINANCIAL POSITION SHARE-BASED PAYMENT EPS JOINT ARRANGEMENTS DISCLOSURES HELD-FOR-SALE PENSION
Contents
About this guide 2
Independent auditors’ report 4
Consolidated fnancial statements 6
Financial highlights 7
Consolidated statement of fnancial position 8
Consolidated statement of proft or loss and
other comprehensive income 10
Consolidated statement of changes in equity 12
Consolidated statement of cash fows 14
Notes to the consolidated fnancial statements 16
Appendix I 185
Presentation of comprehensive income –
Two-statement approach 185
Acknowledgements 187
Keeping you informed 188
Notes
Basis of preparation 16 Accounting policies 152
1. Reporting entity 16 43. Basis of measurement 152
2. Basis of accounting 16 44. Changes in accounting policies 153
3. Functional and presentation currency 16 45. Signifcant accounting policies 155
4. Use of judgements and estimates 16 46. Standards issued but not yet adopted 184
Financial risk review and fair value 18
5. Financial risk review 18
6. Fair values of fnancial instruments 60
Performance for the year 72
7. Operating segments 72
8. Net interest income 76
9. Net fee and commission income 77
10. Net trading income 78
11. Net income from other fnancial instruments
at FVTPL 79
12. Other revenue 80
13. Losses arising from derecognition of
fnancial assets measured at amortised cost 81
14. Personnel expenses 82
15. Other expenses 89
16. Earnings per share 90
Income taxes 91
17. Income taxes 91
Asets 96
18. Financial assets and fnancial liabilities 96
19. Cash and cash equivalents 105
20. Trading assets and liabilities 106
21. Derivatives held for risk management and
hedge accounting 108
22. Loans and advances to banks 118
23. Loans and advances to customers 119
24. Investment securities 121
25. Property and equipment 123
26. Intangible assets and goodwill 124
27. Other assets 126
Liabilities and equity 128
28. Deposits from banks 128
29. Deposits from customers 129
30. Debt securities issued 130
31. Subordinated liabilities 131
32. Provisions 132
33. Other liabilities 134
34. Capital and reserves 135
Group composition 136
35. Group subsidiaries 136
Other information 137
36. Involvement with unconsolidated
structured entities 137
37. Transfers of fnancial assets 138
38. Contingencies 142
39. Related parties 143
40. Operating leases 144
41. Subsequent events 145
42. Financial risk management 146
2 | Guide to annual n� ancial statements : IFR 9�S – Illustrative disclosures of r bansk
About this guide
hT is guide has been produced by the KPMG International tS andards Group p( art o f KPMG IFRG Limited ) and the viesw
epx ressed herein are those o f the KPMG International tS andards Group.
It helps you to prepare n� ancial statements in accordance iw th IFR,S illustrating one possible of rmat of r n� ancial statements
based on a c� titious banik ng group involved in a range o f general banik ng activities. uO r hypothetical corporation t( he
Group ) has been applying IFR S of r some time – i.e. it is not a r� stt- ime adopter o f IFR.S For more inof rmation on adopting
IFR S of r the r� st time, see hC apter 6.1 in the 12 th edition 2011/5 6 o f our publication Insights into IFRS.
Standards covered
hT is guide illustrates eax mple disclosures of r the early adoption o f IFR S 9 Financial Instruments and o f conseuq ential
amendments to other standards, hw ich are reuq ired to be adopted at the same time. It assumes that the Group has
not adopted the hedge accounting reuq irements o f IFR S 9 but continued to apply hedge accounting reuq irements o f
IA.93 �S With the ecx eption o f IFR S ,9 other standards or amendments that are eef f ctive of r annual periods beginning atf er
1aJ � nuary 201 5 of‘( rthcoming reuq irements )’ are not illustrated in this guide. uO r IFRS: New standards – Are you ready?
provides a summary o f nelw y eef f ctive and of rthcoming standards i( n addition to IFR S .)9
Accordingly, ecx ept of r the early adoption o f IFR S ,9 this guide ree� cts IFRsS in issue at 13 eD cember 201 5 that are
reuq ired to be applied by an entity iw th an annual period beginning on 1 aJ nuary 201 5 c‘( urrently eef f ctive reuq irements.)’
IFR S 9 is a ne w and comple x standard, and the interpretation o f its reuq irements is subej ct to ongoing discussions
betew en preparers, auditors, regulators and other staek holders. hT is guide does not intend to pree- mpt this process
and provide a vie w on ho w the reuq irements o f the standard should be interpreted. Instead, it gives an indication
o f possible disclosure reuq irements that ow uld apply i f a ban k interpreted the reuq irements in a particular aw y. It is
intended to help bansk implement IFR S ,9 by guiding them through the decisionm- aik ng process needed to prepare the
reuq iredd� isclosures.
hT is guide is not intended to be seen as a complete and ehx austive summary o f all disclosure reuq irements under IFR.S
Instead, it of cuses on disclosure reuq irements that are particularly relevant to bansk . For eax mples o f other disclosures,
see our Guide to annual fnancial statements – Illustrative disclosures eS( ptember 201.)5
In addition, IFR S and its interpretation change over time. Accordingly, this guide should not be used as a substitute of r
reef rring to the standards and interpretations themselves.
An entity should also have regard to applicable legal and regulatory reuq irements. hT is guide does not consider the
reuq irements o f any particular uj risdiction. For eax mple, IFR S does not reuq ire the presentation o f separate n� ancial
statements of r the parent entity, and this guide includes only consolidated n� ancial statements.
Other guidance
In preparing this guide, ew had regard to the recommendations made by the nE hanced iD sclosure aT s k Force FTDE( ) in its
report Enhancing the Risk Disclosures of Banks, issued on 2 9 cO tober 2012, and its revision issued on 7 eD cember 201,5
Impact of Expected Credit Loss Approaches on Bank Risk Disclosures. hT e purpose o f this report is to help bansk improve
their communication iw th their staek holders in the area o f ris k disclosures, iw th the ultimate aim o f improving investor
cond� ence. hT e recommendations ’ scope is iw der than the n� ancial statements, because they apply to all n� ancial
reports, including public disclosures reuq ired by regulators and other communications iw th staek holders. In some cases,
recommendations in the report may impact the manner o f presentation o f inof rmation that is already reuq ired to be
disclosed under IFR.S In other cases, it recommends disclosure o f ne w inof rmation.
Many regulators continue to of cus on disclosures in n� ancial statements. For eax mple, the uE ropean eS curities and
Marek ts Authority MSE( A ) has published its public statement on uE ropean common enforcement priorities of r 201 .5 hT is
statement identie� s specic� considerations relevant of r the banik ng sector in 201 .5
In addition, in preparing this guide ew also had regard to the recommendations made by the aB sel oC mmittee on aB nik ng
uS pervision in its Guidance on credit risk and accounting for expected credit losses issued in eD cember 201.5
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION
About this guide � | 3
Need for judgement
hT is guide is part o f our suite o f publications – Guides to fnancial statements – and specic� ally of cuses on compliance
iw th IFR.S Although it is not ehx austive, this guide illustrates the disclosures required by IFR S of r one hypothetical ban k
or a similar n� ancial institution ; of r ease o f illustration, the disclosures here are generally presented iw thout regard
tom� ateriality.
hT is guide should not be used as a boiler plate template. hT e preparation o f an entitys’ onw n� ancial statements reuq ires
uj dgement, in terms o f the choice o f accounting policies, ho w the disclosures should be tailored to ree� ct the entitys’
specic� circumstances, and the materiality o f disclosures in the contetx o f the organisation.
Applying the concept of materiality to disclosures
An entity needs to consider the concept o f materiality hw en preparing the notes to its n� ancial statements ; it is not
appropriate simply to apply the disclosure reuq irements in a standard iw thout considering materiality. An entity does not
need to provide specic� disclosures under IFR S i f the inof rmation resulting rf om that disclosure is immaterial. Also, an
entity has to taek care not to reduce the understandability o f its n� ancial statements by obscuring material inof rmation
iw th immaterial inof rmation or by aggregating material items that have dief f rent natures and uf nctions.
For eax mple, a standard may provide specic� disclosures of r a material item in the n� ancial statements, but even i f the
item is material, this does not mean that all o f the disclosures specie� d in that standard iw ll be material of r that item. An
entity applies the materiality concept on a disclosureb- yd- isclosure basis.
Step-up in the quality of fnancial statements
Investors continue to as k of r a stepu- p in the uq ality o f business reporting so entities should be careuf l not to become
buried in compliance to the ecx lusion o f relevance. In preparing its n� ancial statements, an entity needs to ek ep in mind
its iw der responsibilities of r reporting this inof rmation in the most meaninguf l aw y. For more inof rmation, see our Better
business reporting ew bsite.
References and abbreviations
Reef rences are included in the letf h- and margin o f this publication to identiyf their sources. Generally, the reef rences
relate only to presentation and disclosure reuq irements.
IAS 1.82(a) Paragraph 28 a( ) o f IA S 1.
[IFRS 9.4.1.1] Paragraph .4 1.1 o f IFR S .9 hT e bracek ts indicate that the paragraph relates to recognition and
measurement reuq irements, as opposed to presentation and disclosure reuq irements.
th
Insights 2.3.60.10 Paragraph 2..3 60.10 o f the 12 edition 2011/5 6 o f our publication Insights into IFRS.
IFRS 7R.8 Paragraph 8 o f IFR S 7 as amended by IFR S .9
IFRS 7.8 Paragraph 8 o f IFR S 7 beof re amendments by IFR S .9
iD sclosures that are applicable only to entities in the scope o f IFR S 8 Operating Segments and
IA 3 �S Earnings per Share.
Footnotes in italics refer to recommendations in the EDTF report, which are not specifc requirements of IFRS.
hT e of lloiw ng abbreviations are used otf en in this guide.
GC U aC shg- enerating unit
LCE pxE ected credit losses
FTDE nE hanced iD sclosure aT s k Force
PE S aE rnings per share
FICO V Fair value through other comprehensive income
FPTV L Fair value through prot� or loss
ICN oN nc- ontrolling interests
oN tes oN tes to the n� ancial statements
ICO tO her comprehensive income
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION
4 | Guide to annual n� ancial statements : IFR 9�S – Illustrative disclosures of r bansk
[Name of auditors’ frm]
Independent auditors’ report
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION
Independent auditors ’ report | 5
a
Independent auditors ’ report on consolidated n� ancial statements
[Addressee]
eW have audited the accompanying consolidated n� ancial statements o f [ name of bank ] t( he
aB‘ n,)’k hw ich comprise the consolidated statement o f n� ancial position as at 13 eD cember 201,5
the consolidated statements o f prot� or loss and comprehensive income, changes in euq ity and
cash o� sw of r the year then ended, and notes, comprising a summary o f signic� ant accounting
policies and other epx lanatory inof rmation.
Management’s responsibility for the consolidated fnancial statements
Management is responsible of r the preparation and af ir presentation o f these consolidated
n� ancial statements in accordance iw th International Financial Reporting tS andards, and of r such
internal control as management determines is necessary to enable the preparation o f consolidated
n� ancial statements that are rf ee rf om material misstatement, hw ether due to rf aud or error.
Auditors’ responsibility
uO r responsibility is to epx ress an opinion on these consolidated n� ancial statements based on
our audit. eW conducted our audit in accordance iw th International tS andards on Auditing. hT ose
standards reuq ire that ew comply iw th ethical reuq irements and plan and perof rm the audit to
obtain reasonable assurance about hw ether the consolidated n� ancial statements are rf ee rf om
material misstatement.
An audit involves perof rming procedures to obtain audit evidence about the amounts and
disclosures in the consolidated n� ancial statements. hT e procedures selected depend on our
uj dgement, including the assessment o f the rissk o f material misstatement o f the consolidated
n� ancial statements, hw ether due to rf aud or error. In maik ng those ris k assessments, ew
consider internal control relevant to the entitys’ preparation and af ir presentation o f the
consolidated n� ancial statements in order to design audit procedures that are appropriate in
the circumstances, but not of r the purpose o f epx ressing an opinion on the eef f ctiveness o f the
entitys’ internal control. An audit also includes evaluating the appropriateness o f accounting
policies used and the reasonableness o f accounting estimates made by management, as ew ll as
evaluating the overall presentation o f the consolidated n� ancial statements.
eW believe that the audit evidence ew have obtained is suc� f ient and appropriate to provide a
basis of r our audit opinion.
Opinion
In our opinion, the consolidated n� ancial statements give a true and af ir vie w o f the consolidated
n� ancial position o f the aB n k as at 13 eD cember 201,5 and o f its consolidated n� ancial
perof rmance and its consolidated cash o� sw of r the year then ended in accordance iw th
International Financial Reporting tS andards.
[Name of auditors’ frm]
[Date of report]
[Address]
a. hT is eax mple report has been prepared based on International tS andard on Auditing 07 0 Forming an Opinion and
Reporting on Financial Statements. Its of rmat does not ree� ct the legal reuq irements o f any particular uj risdiction.
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT IRTN UDO ITC NO
6 | Guide to annual n� ancial statements : IFR 9�S – Illustrative disclosures of r bansk
[Name of bank]
Consolidated fnancial
statements
31 December 2015
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION
IlIllulussttrraattivivee d disiscclolossuurreess – P – Friinmaanrcyi asl thaitgehmligehnttss � | 7
a
Financial highlights
REVENUE PROFIT BEFORE BASIC EARNINGS
TAX PER SHARE
(million euro) (million euro) (euro)
9.6% 22.6% 0.05
2015 2014 2015 2014 2015 2014
DIVIDENDS PER CORETIER 1 CAPITAL
ORDINARY SHARE
(euro) (million euro)
0.00 8.0%
2015 2014 2015 2014
REVENUE BY SEGMENT REVENUE BY REGION
2015 2015
Central Treasury
Asset 6% Middle East and Country
Management Africa 11% of domicile
2%
Investment 14%
Banking Australia
32% 17%
Retail
Banking US 25%
37%
Other 5%
UK 28%
Corporate Banking 23%
a. aB nsk iw ll have to consider the impact o f IFR S 9 on comparability o f the n� ancial highlights and hw ether additional
epx lanations are necessary.
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
4,188
3,820
0.15
0.15
824
672
4,713
4,056
0.34
0.29
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION
8 | Guide to annual n� ancial statements : IFR 9�S – Illustrative disclosures of r bansk
a, b
oC nsolidated statement o f n� ancial position
IAS 1.10(a), 10(ea), 31 December 31 December
38–38A, 40A–40B, 113 In millions of euro Note 2015 2014
Assets
IAS 1.54(i) aC sh and cash euq ivalents 19 2,907 2,29
IAS 1.54(d) oN np- ledged trading assets 20 16,122 1,5 2 94
IAS 1.54(d), 39.37(a), Pledged trading assets 20 540 15 9
IFRS 9.3.2.23(a)
IAS 1.54(d) eD rivative assets held of r ris k management 21 858 27 6
IAS 1.54(d) Loans and advances to bansk 22 5,572 ,4 07 7
IAS 1.54(d) Loans and advances to customers 23 62,347 65 ,08 5
IAS 1.54(d) Investment securities 24 6,302 ,5 26 9
IAS 1.54(n) uC rrent ta x assets 47 35
IAS 1.54(a) Property and euq ipment 25 409 873
IAS 1.54(c) Intangible assets 26 275 2 95
IAS 1.54(o) eD ef rred ta x assets 17 557 269
tO her assets 27 689 65 3
Total assets 96,625 ,7818 6
The notes on pages 16 to 184 are an integral part of these consolidated fnancial statements.
© 2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
APPENDICES NOTES PRIMARY STATEMENTS AUDITORS’ REPORT INTRODUCTION