Banking Disclosure

Date recorded:

Staff made a presentation on the progress of the steering committee on IAS 30. The IAS 30 Steering Committee believes that a separate Standard for banks and similar financial institutions should remain and that increased guidance will have big benefits. Reasons to revise IAS 30:

Eliminate redundancies with other IAS

  • Offsetting requirements - IAS 32
  • Fair value disclosure - IAS 32
  • Related party disclosure - IAS 24
  • Loan loss recognition - IAS 39
Update of IAS 30 disclosure guidance
  • Balance sheet disclosures
  • Income statement disclosures - including loan loss
  • Off balance sheet exposure
  • Trust activities

Raise Disclosure Level of Banking Activities Within IAS/IFRS

Two key disclosure areas are were discussed, based on suggestions from regulatory and user bodies. Note these requirements already exist in many countries:

  • Risk management and exposure
  • Regulatory capital adequacy
The Board debated the need for these disclosures in general purpose financial reports, in particular whether such items would be required of other entities. Although support exists for extended disclosure, Board members expressed concern about creating a long list of disclosures in the absence of demonstrated need. Areas for which expanded disclosure is considered necessary include:
  • Credit risk exposure
  • Other risk exposures
  • Risk management policies
  • Capital adequacy
The large number of responses received by the Basle Committee on their proposed disclosures indicates the high level of interest in the project. Therefore, the Board intends to continue with the project. It concluded that the Steering Committee should be reconstituted as an Advisory Group and expanded to include the involvement of analysts and users. They should continue to draft an Exposure Draft. The Board has asked that the Advisory Group consider the extent to which the proposed requirements apply to entities other than banks and the effect of dispersing the proposed requirements throughout other IAS standards. This would address concerns that some of the proposed requirements should relate to non-banking entities where there are significant lending activities. It would also avoid incremental guidance solely for banks that relates to many industries.

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