Single Rulebook Q&A

Question ID: 2017_3596
Legal act : Regulation (EU) No 575/2013 (CRR) as amended
Topic : Supervisory reporting
Article: Article 99
Paragraph:
Subparagraph:
COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph : Annex III
Type of submitter: Credit institution
Subject matter : Template 17 for a financial conglomerate , that elects that none of its entities operating in the insurance sector apply IFRS 9 for financial years beginning before 2021.
Question:

How shall a financial conglomerate as defined in Article 2(14) of Directive 2002/87/EC which adopts the deferral of the application of IFRS 9 for its entities operating in the insurance sector (Article 2(8)(b) of the Directive) should fill in template 17 ‘Reconciliation between accounting and CRR scope of consolidation: Balance Sheet’ (in particular, templates F 17.01 and F 17.03), as both financial assets and financial liabilities of the controlled insurance companies will continue to be classified according to IAS 39 and not to IFRS 9?

Background on the question:

Commission Regulation (EU) 2017/1988 of 3 November 2017 (amending Regulation N. 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) N. 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 4) has given the possibility to a financial conglomerate to elect that none of its entities operating in the insurance sector apply IFRS 9 till 2021. So, the consolidated insurance companies of a financial conglomerate that will adopt the option to defer the effective date of IFRS 9 for its insurance sector will continue to use IAS 39 to classify and measure their financial assets until 1 January 2021. Consequently, a financial conglomerate that will adopt the ‘deferral approach’ needs to know how to input the financial assets of its insurance sector, still managed according to IAS 39, in the abovementioned template 17. Guidelines on this subject are necessary to define the necessary IT implementations too.

Date of submission: 16/11/2017
Published as Final Q&A: 27/07/2018
EBA answer:

A financial conglomerate which consolidates an insurance company that adopts the option to defer the effective date of IFRS 9 to 2021 shall

-       refer to ‘Financial assets measured at fair value through other comprehensive income’ for ‘Available for sale assets’; and

-       gather in the portfolio ‘Assets at amortised cost financial instruments classified in ‘Held to maturity’ as well as in ‘Loans and receivables’

for the purposes of reporting templates F 17.01, F 17.02 and F 17.03 of Annexes III and IV to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) as amended by Regulation (EU) 2017/1443.

Status: Final Q&A
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