Launch Event, IFRS Seminar for Regulators on 2 December 2009 in Vienna
A Seminar on the use of IFRS for prudential purposes was organized by the CFRR in Vienna, Austria, on 2 December 2009. The objectives of the seminar were to inform participants about the latest developments on IFRS for the financial sector, and seek their interest in further IFRS seminars.
The seminar was facilitated by Henning Göbel, Chief Accountant at BaFin, who introduced the functioning of the International Accounting Standards Board and relevant projects to the financial sector. Joaquim Wassman, Germany Bundesbank, and Shamim Diouman, Manager Risk and Regulation at the Institute of Chartered Accountants of England and Wales, presented fair value measurement, impairment, and recycling, loan loss provisioning, prudential filters, and the IFRS Insurance Project.
Fifty participants from all Regional REPARIS countries attended the seminar. While many participants worked as prudential supervisors at insurance supervision agencies and central banks, some representatives of ministries of finance and securities supervisors also attended. Participants were pleased with the seminar, welcomed further learning events on IFRS and ongoing information on IFRS and regulatory reporting. For future IFRS seminars, participants would prefer a two-day format. Participants wish also to have learning materials in advance to better prepare for the seminar.
Participants asked many questions after the presentations and were interested in practical examples. It was further agreed that the CFRR team would deliver more extensive training sessions, both via distant learning and through face to face events, to provide more in-depth information and business cases. For example, participants were interested in good examples on loan loss provisioning and fair value application. The objective of the first seminar on IFRS for regulatory purpose was to introduce all topics under the use of IFRS for prudential purposes. Each presentation of the seminar will be expanded on at the request of the participants.
IASB and Projects Relevant to the Financial Sector (H. Göbel) - IASB: organisation, standard-setting process, endorsement process by the EU - Major projects with relevance to the financial sector
Fair Value Measurement, Impairment, Recycling (S. Diouman) - Determination of fair value for the main financial instruments held by credit institutions and insurance companies - the determination of impairment losses on Available for Sale assets and recycling of Other Comprehensive Income through P&L
Loan Loss Provisioning (J. Wassmann) - Determination of impairment losses - Incurred loss vs. expected loss model: differences and impacts
Discussion of Issues from Morning Sessions – All
Prudential Filters (J. Wassmann) - Background, objectives, main examples - Implementation: orders and guidelines
The Insurance Project (S. Diouman) - Building blocks and margins - Discounting technical provisions
Discussion and Next Steps (H. Göbel)
Shamim is the Manager of Risk and Regulation at the Institute of Chartered Accountants of England and Wales (ICAEW). He is currently working on regulatory issues affecting banks and insurers such as the new regulatory framework, liquidity risk, stress testing and Solvency 2.Prior to joining the ICAEW, Shamim worked in the Accounting Policy Team at the FSA and the Financial Services Department of KPMG. He has provided training sessions to members of the Financial Stability Institute in Basel, supervisors and accountants in Europe and internationally.
He also specialises in fair value - IAS 39 and insurance accounting - IFRS Phase II. He has worked on disclosure, especially Basel II Pillar 3 and IFRS 7. Shamim has represented the FSA on a number of international panels including: IAIS Insurance Contracts and IAIS Accounting Subcommittees, Basel Accounting Task Force (ATF) subgroups on Financial Instrument Practices, Insurance Accounting Implications for Banking, and Conceptual Framework Issues. He has also represented the IAIS and IOSCO accounting subgroups in a number of International Accounting Standards Board (IASB) roundtables and expert panel meetings on fair value, consolidation and disclosure. Shamim Diouman was the Vice Chair of the IAIS Accounting subcommittee.
Shamim Diouman is a Chartered Accountant and holds a Masters in Economics.
Joachim Wassmann is a senior expert in accounting at the Deutsche Bundesbank, the German central bank. He holds the position of a deputy head of section in the Accounting and Supervisory Databases Division of the Bundesbank’s Banking and Financial Stability Department. He is currently working on recent accounting developments in International Financial Report Standards and German GAAP from a banking supervision perspective. He provides training sessions on regulatory issues of International Financial Reporting Standards and consolidated financial statements under German GAAP and IFRS.
Prior to joining Deutsche Bundesbank, Joachim worked at the analysis section for large exposures in a large German banking group.Joachim is representing the Deutsche Bundesbank in several international, European and German Panels including: Financial Instruments Practices Subgroup of the Basel Accounting Task Force (ATF) and the Accounting Subgroup of the Expert Group on Financial Information at the Committee of European Banking Supervisors (CEBS).
Joachim is a Graduate in Business Administration (Diplom-Kaufmann)
What is IFRS?
A single set of high-quality international financial reporting standards supports the efficient operation of the markets by ensuring that investors, creditors and other stakeholders have access to timely, reliable and relevant information about the financial conditions of companies. Regulators are one of the primary user groups of financial reporting. It is very important for supervisors to understand how to analyze annual reports and supporting disclosure materials. In order to use financial statements prepared under IFRS for prudential and regulatory purposes, a range of adjustments are recommended by prudential standard setters such as the Basel Committee and the International Association of Insurance Supervisors. Both the analysis of financial statements and the proper use of regulatory adjustments, labeled as prudential filters, requires a thorough understanding of current IFRS and prudential implications. This activity stream is intended to support regulators from Regional REPARIS countries accordingly.