Legacy IAS 39 accounting portfolios
- Question ID: 2020/0021
- Date of publication: 31/01/2020
- Subject matter: Accounting-related data attributes
- AnaCredit Manual: Part II
- Data attribute: Accounting classification of instruments, Accounting standard
Could you clarify whether the following three accounting portfolios – Available-for-sale financial assets (GAAP), Loans and receivables (GAAP) and Held-to-maturity investments (GAAP) – are expected to be reported under AnaCredit? If so, could you clarify the reporting of the data attributes “Impairment”, “Accumulated changes in fair value due to credit risk” and “Prudential portfolio” for instruments in these portfolios, as these are not covered in Table 49 in Part II of the Reporting Manual?
Available-for-sale financial assets, Loans and receivables and Held-to-maturity investments are legacy IAS 39 categories. The adoption of IFRS 9 in the EU led to changes in the reporting of financial information, including the following changes to the breakdown of financial assets in accounting portfolios:
- deletion of the “Held-to-maturity” accounting portfolio, which no longer exists in IFRS 9;
- replacement of the “Available-for-sale (AFS)” accounting portfolio by the “Fair value through other comprehensive income (FVOCI)” accounting portfolio;
- replacement of the “Loans and receivables” accounting portfolio with the “Amortised cost” accounting portfolio.
The changes affect IFRS reporters and also entail changes for national GAAP reporters to ensure consistent information. The changes have been applicable since the beginning of 2018 and were introduced throughout the FINREP templates.
The categories are still referred to AnaCredit as admissible values under the data attribute “accounting classification of the instrument”. That said, please note that only non-IFRS compatible national GAAP reporters may use these categories, insofar as the use of the legacy IAS39 classification is still allowed in national GAAP reporting. Meanwhile, IFRS-compatible reporters use the IFRS 9 categories only.
With regard to an indication of the possible combinations of the data attributes “Impairment”, “Accumulated changes in fair value due to credit risk” and “Prudential portfolio” for instruments classified in any of the three portfolios, note that instruments in these categories can have “impairment”. None of them can have “accumulated changes in fair value due to credit loss” (therefore, the value “non-applicable” is reported) and they all are in the “Non-trading book”.