Full IAS 39 compliance of banking book
Implementing IFRS standards for financial instruments requires significant changes in IT banking systems. Deloitte’s Risk Technology team has developed a software package which minimizes the impact of IFRS regulations on banking systems and enables banks to migrate easily into IFRS reporting requirements. Deloitte’s accounting solution, named “IFRS Tools”, supports IFRS reporting in the following areas:
- Interest income recognition using the effective interest rate method (EIR), applicable for term loans as well as Held-To-Maturity and Available-For-Sale debt instruments (IAS 18 and IAS 39).
- Interest expense recognition on term deposits and other financial liabilities (IAS 39).
- Measuring financial instruments at amortized cost (AC) using the effective interest rate (IAS 39).
- Recognition and measurement of impairment of financial assets and provisions for off-balance sheet credit exposures (loan loss provisioning) using individual and collective methods (IAS 37 & IAS 39).
- Recognition of interest revenue on impaired assets (IAS 39).
IFRS Tools consist of three main modules: the EIR Tool, Impairment Tool and Accounting Module. It is a highly customizable software package, designed and developed to directly fulfil the above mentioned requirements, and to easily integrate with an overall IFRS adoption program.