The impact assessment looked at qualitative and quantitative aspects and provided the following results:

Qualitative aspects

• The smaller banks surveyed are lagging behind in their preparation compared to larger banks.
• The involvement of some key stakeholders in IFRS 9 implementation seems limited at the current stage.
• Many respondents plan to perform parallel runs to test the implementation of IFRS 9, but it seems that this testing may be more limited than originally envisaged due to there being insufficient time between the completion of the building of the systems and initial application of IFRS 9.
• Banks are generally looking to leverage off existing definitions, processes, systems, models and data used for regulatory and credit risk management purposes in order to implement IFRS 9 impairment requirements, although new models and/or adjustments to existing models will be necessary.
• Data quality and availability are the most significant challenges for banks responding to the survey and they expect to use different (internal and external) sources of data.
• Overall, the impact of the change in classification and measurement requirements does not seem very significant for most banks.
• The interpretation and application of some key elements of IFRS 9 impairment requirements are challenging and have to be finalised in many cases.
• Available practical expedients of IFRS 9 will be used by banks.
• 75% of the banks included in the survey anticipate that IFRS 9 impairment requirements will increase volatility in profit or loss.

Quantitative aspects

• The total estimated impact of IFRS 9 is mainly driven by the impairment requirements and only to a lesser degree by the classification and measurement requirements of IFRS 9.
• The estimated change in provisions varies from portfolio to portfolio and different factors could influence the impact of IFRS 9 in percentage terms on own funds.
• The reclassification of financial instruments between categories may also have an impact on own funds.
• The estimated increase of provisions compared to the current levels of provisions under IAS 39 is 18% on average and up to 30% for 86% of respondents.
• In terms of the estimation of the total quantitative impact of IFRS 9, CET1 and total capital ratio are estimated to decrease, on average, by 59 bps and 45 bps respectively.

The full report can be accessed on the EBA website. The EBA also announces that it will be conducting a second exercise to assess the impact at a later point of time, when more reliable and precise information can be provided by respondents as a result of their ongoing efforts to implement IFRS 9.

The agenda for the meeting is sum­marised below:

Agenda papers for the meeting are currently being made available on the IASB's website.

The report features existing activities and initiatives within the profession that support the goals and poses questions for professional accountancy organisations and professional accountants to consider.

The eight goals identified are:

• Goal 4: Quality education
• Goal 5: Gender equality
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation, infrastructure
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 16: Peace and justice and strong institutions
• Goal 17: Partnership for the goals

The report can be accessed through the press release on the IFAC website.

Please click through for the notes relating to the following issues:

Item for continuing consideration:

• IFRS 9 and IAS 39 — Fees and costs included in the 10 per cent test for derecognition of financial liabilities

Finalisation of draft agenda decisions:

• IAS 12 — Expected manner of recovery of intangible assets with indefinite useful lives
• IAS 32 — Written put option over NCI

Deliberations of comments received:

• Draft IFRIC IAS 12 — Uncertainty over income tax treatments

New issues:

• IFRS 10 — Investment entity consolidation
• IFRS 9 — Modification/ exchange gains/ losses of financial liabilities that do not result in derecognition
• IFRS 9 — Impact of symmetric ‘make whole’ and fair value prepayment options on assessment of the ‘solely payments of principal and interest on the principal amount outstanding’ (SPPI) condition
• IFRS 5/IFRS 9/IAS 39 — Application of IFRS 9/ IAS 39 relating to transactions of a subsidiary when the subsidiary is held for sale (including application of the business model assessment requirements in IFRS 9)
• Commodity loans (an issue not falling into any particular standard)

Issue on hold:

• IAS 28 — Assessment of significant influence: Fund manager acting as an agent and holding own investments in the fund

Post implementation review:

• IFRS 13 Fair Value Measurement

Administrative session:

• Work in progress

The preliminary and unofficial notes taken by Deloitte observers for the entire meeting are also available.

On 15 November 2016, the Climate Disclosure Standards Board (CDSB) and the World Business Council for Sustainable Development (WBCSD) offer a joint webinar to introduce the new Reporting Exchange platform. The platform is a freely available, collaborative, global knowledge platform to help business users prepare sustainability information for voluntary, compliance, or mainstream reporting purposes. More information is available on the CDSB website.

On 22 November 2016, the Climate Disclosure Standards Board (CDSB) and We Mean Business: Commit to Action offer a joint webinar about how the changing policies in the remainder of 2016 including the recommendations by the G20 Task Force on Climate-Related Financial Disclosures and the EU Non-Financial Reporting Directive may affect the way companies report climate change information in their mainstream annual reports. More information is available on the CDSB website.

The questionnaire can be accessed through the press release on the EFRAG website. The deadline for comments is the same as the deadline of the earlier consultation document – 8 December 2016.

The meeting will include discussions on:

• Disclosure initiative: Materiality
  • Errors
  • Covenants
  • Stewardship
  • Recognition and measurement
  • Entities applying the IFRS for SMEs
  • Status and form of the guidance
• Insurance contracts
  • Methodology - external testing of draft IFRS 17
  • Results - external testing of draft IFRS 17
  • Level of aggregation
  • Experience adjustments
  • Transition issues
  • Mitigating financial risks reflected in insurance contracts
  • Other sweep issues
  • Mandatory effective date of IFRS 17
• Primary financial statements
  • Analysis of financial statements presentation
  • Use of performance measures
  • Literature review
  • Summary of outreach on scope of project
  • Ten possible approaches presented during outreach
• Financial instruments with characteristics of equity
  • Summary of discussions to date
  • Exception in Paragraphs 16A – 16D of IAS 32
• IFRS implementation issues
  • IFRS 9 / IAS 28 — Long-term interests (due process steps)
  • Property, plant and equipment — Proceeds before intended use (due process steps)
• Conceptual framework
  
  • Summary of tentative decisions
  • Liability definition and supporting concepts
  • Testing the proposed asset and liability definitions — illustrative examples
  • Effects of the proposed changes to the Conceptual Framework on preparers

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries as well as observer notes from the meeting on this page as they become available.

The Advisory Council is the formal advisory body to the Trustees and the IASB. It advises the IFRS Foundation on its strategic direction, technical work plan and priorities.

The new Advisory Council members are:

• Replacement of representatives of existing organisations on the Council with immediate effect:
  • Jean Paul Gauzes - European Financial Reporting Advisory Group
  • Paul George - UK Financial Reporting Council
  • Jessica Magana - Comision Nacional Bancaria y de Valores
• Replacement of representatives of existing organisations on the Council effective 1 January 2017:
  • Abdulrahman Fahd Almosad - CMA International Association of Insurance Supervisors
  • Dr Giuseppe Ballocchi CFA - CFA Institute
  • Dr Jee In Jang - Korean Accounting Standards Board
  • Olivia Larmaraud - ACTEO & MEDEF
  • James Luke - EY
• Representatives of new organisations on the Council effective 1 January 2017:
  • Prof Xinyuan Chen - Shanghai University of Finance and Economics
  • Suresh C. Senapaty - Wipro Ltd
  • Dr Etty Wulandari - Indonesian Financial Services Authority

The following members of the Advisory Council have been reappointed for a second term: Roxana Damianov, Holger Daske, Micheline Dionne, Dr Jens Freiberg, Hidetake Ishihara, Olav Jones, Jürgen Kirchhof, Goro Kumagai, Surya Subramanian, and Dr Lothar Weniger.

The press release announcing the new appointments can be found on the IASB's website.

An agenda with supporting papers and details on how to register for the public meeting can be found on the EFRAG website.

The Update reports on the EFRAG Board meeting on 6 October and the EFRAG Technical Expert Group (EFRAG TEG) meeting on 26 and 27 October.

The Update also lists EFRAG publications issued in October:

• EFRAG’s Preliminary Consultation Document relating to the endorsement for use in the EU of IFRS 16 Leases; and
• EFRAG’s draft endorsement advice and invitation to comment relating to the endorsement for use in the EU of Classification and Measurement of Share-based Payment Transactions – Amendments to IFRS 2. 

Please click to download the October EFRAG Update from the EFRAG website.