EBA publishes final Guidelines on disclosure requirements of IFRS 9 transitional arrangements

12 January 2018

The European Banking Authority (EBA) published today its final Guidelines on disclosure requirements of IFRS 9 or analogous expected credit losses (ECLs) transitional arrangements. The guidelines specify a uniform disclosure template institutions shall use when disclosing the information on own funds, capital and leverage ratios, with and without the application of transitional arrangements for IFRS 9 or ECLs. The aim of these Guidelines is to ensure consistency and comparability of the data disclosed by institutions during the transition to the full implementation of the new accounting standard and to foster market discipline.
Following the application of IFRS 9 as of 1 January 2018, institutions will be allowed to phase-in the impact on capital and leverage ratios of the impairment requirements resulting from the implementation of the new accounting standard. Institutions that decide to apply the IFRS 9 or analogous ECLs transitional arrangements are required to publicly disclose their own funds and capital and leverage ratios both with and without the application of these arrangements in order to enable users of this information to determine the impact of such arrangements. 
To ensure consistency of the disclosure of these parameters, it is crucial that a uniform format is used. These Guidelines specify the uniform disclosure format institutions shall use for this purpose. The Guidelines also take into account the developments on disclosure at international level, namely the standards on Pillar 3 disclosure requirements, issued by the Basel Committee on Banking Supervision (BCBS) on 29 March 2017, which foster comparability of capital metrics with non-EU international active banks.
Following a two-month consultation process, some amendments have been introduced to the Guidelines in order to further improve comparability and to better reflect the institutions' decision on the application of the transitional arrangements and on their choices regarding the legal options to calculate the transitional arrangements.

Legal basis and background

These Guidelines have been drafted in accordance with Article 473a, paragraph 10 of the CRR, which mandates the EBA to issue guidelines on the disclosure requirements laid down in the same Article. This Article was introduced by Regulation (EU) 2017/2395 of the European Parliament and of the Council of 12 December 2017 amending Regulation (EU) No 575/2013 as regards transitional arrangements for mitigating the impact of the introduction of IFRS 9 on own funds and for the large exposures treatment of certain public sector exposures denominated in the domestic currency of any Member State.


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