This workshop provides a detailed review of the significant technical requirements of International Financial Reporting Standards (IFRSs), including accounting and reporting for financial instruments, as well as other standards relevant to the financial services sector. It includes coverage of the requirements of the relevant standards and interpretations, hands-on case studies, examples, exercises, small-group projects, and benefits from the interactive participation of the attendees. Our specialist instructors explain the principles clearly and simply and provide real-world examples, thereby immersing participants in the intricacies of IFRSs and the implications for banks and other financial institutions.

Utilizing a highly interactive format, this course provides a comprehensive overview of the effects that IFRS 9 Financial Instruments has on the financial statements of financial institutions.

The principles of the standards are demonstrated with numerous illustrative examples, complemented by application of the standards in an interactive group environment utilizing case studies, model and real-world financial statements and practical exercises.

The registration fee for this unique event includes:

  • 5 days of formal tuition by some of our most senior instructors
  • Full set of course materials (including case studies, illustrations and examples)
  • Lunch and refreshments on every teaching day

Learning Objectives

  • Prepare and analyse IFRS financial statements, including statement of financial position, statement of profit or loss and other comprehensive income, statement of cash flows, statement of changes in equity and the notes to the financial statements
  • Comply with the extensive IFRS disclosure requirements, including accounting policies and changes in accounting policies, earnings per share, related parties, operating segments, and the qualitative and quantitative disclosures for financial instruments
  • Apply IFRS requirements for recognition and measurement of assets, liabilities, revenues, expenses, gains and losses
  • Classify and measure financial assets under IFRS 9’s three categories
  • Calculate the effective interest rates for various financial instruments common to the banking industry and apply the effective interest method for recognition of interest income and expense
  • Differentiate embedded derivatives between those that must be accounted separately and those that do not require separation from their host instruments under IFRS 9
  • Calculate impairment of loans and other financial assets in accordance with IFRS 9, as well as impairment of non-financial assets using the ‘cash-generating units’ approach in accordance with IAS 36
  • Apply IFRS requirements for hedge accounting, repossessed assets, loan commitments, loan fees, and financial guarantees
  • Analyse the five-step framework for recognition of revenue in IFRS 15 Revenue from Contracts with Customers, and apply the principles to recognition of income in the banking industry
  • Apply the principles in IFRS 16’s lease accounting model and analyse its impact on the financial statements

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This comprehensive two-day course provides an overview of the most important accounting and reporting requirements for derivatives and hedging activities in accordance with Topic ASC 815 (FAS 133, 138, 149, 150, 155, 156, 159, ASU 2017-12, and related pronouncements under US GAAP).

The course includes a review of significant accounting policies and necessary disclosures, in accordance with the pronouncements of:

  • The Financial Accounting Standards Board (FASB)
  • The Securities Exchange Commission (SEC)
  • The Emerging Issues Task Force (EITF)

These requirements are explained in clear, simple language and illustrated with model journal entries, corporate annual reports, and other real-world examples. Application of the various standards is illustrated through the use of short case studies.

In addition to a review of current US GAAP developments, course participants receive information on likely future pronouncements and the probable impact of their adoption.

This course answers questions such as:

  • What are the current and likely future requirements for hedge accounting under US GAAP?
  • What is the probable impact of adopting new or proposed requirements?
  • How are effective hedges designed, documented and tested?
  • How are embedded derivatives identified and accounted for?
  • What are the principal similarities and differences between US GAAP and IFRSs in the area of derivatives and hedge accounting?

Learning Objectives

  • Understand the reasons why companies hedge
  • Comprehend how to construct a successful hedge
  • Learn how to assess hedge effectiveness
  • Identify and account for fair value and cash flow hedges
  • Apply appropriate accounting treatment to interest rate swaps and foreign currency hedges
  • Comply with the accounting requirements for embedded derivatives
  • Identify derivatives that qualify for the scope exception
  • Become familiar with recent pronouncements and current issues

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In recent years the use of derivatives and other financial instruments, in particular for treasury risk management, has increased substantially. This has resulted in complex accounting rules issued by the Financial Accounting Standards Board (FASB) in order to properly reflect the impact of these items in the financial statements. These complex rules have made the application of US GAAP in the area of financial instruments challenging.

This two-day course provides an in-depth illustration and explanation of the requirements of ASC 825 Financial Instruments, ASC 815 Derivatives and Hedging, and ASC 820 Fair Value Measurement. Utilizing practical examples and hands-on exercises, this course demonstrates the rules for classification, recognition, derecognition, measurement and impairment of financial instruments; application of the effective interest method; and determining the distinction between financial liabilities and equity. In clear and simple language, our specialist instructors also explain the rules for derivatives, embedded derivatives, and hedge accounting. The extensive disclosure requirements in relation to financial instruments are also discussed and illustrated.

This course answers questions such as:

  • How should financial instruments be classified and what are the changes effective from 2018?
  • What are the restrictions on reclassifications of financial assets?
  • What is the ‘fair value option’ and how is it applied?
  • How is the effective interest rate calculated?
  • How is impairment of financial assets measured and accounted for, and what are the proposed changes to measurement of credit losses?
  • What are the requirements for hedge accounting?
  • When should embedded derivatives be separated?
  • What are the current disclosure requirements in relation to financial instruments and what is the impact of changes to the accounting for financial instruments?
  • How and when is GAAP changing as a result of amendments published to date?

Learning Objectives

  • Understand and apply the US GAAP recognition, measurement and derecognition requirements for financial assets and financial liabilities.
  • Learn the complex rules for classifying financial assets into trading, available-for-sale and held-to-maturity portfolios and analyse the amended rules effective from 2018.
  • Compute the effective interest rate and calculate the amortised cost of financial assets and financial liabilities using the effective interest method.
  • Determine fair value under the mark-to-market valuation requirements for unlisted equity and illiquid debt.
  • Understand the different types of derivative instruments, and how they are recognized at inception and accounted for subsequently to maturity.
  • Calculate impairment losses for financial assets and analyse the amended approach effective from 2020.
  • Apply the stringent requirements for hedge accounting and analyse the key proposed changes.
  • Participate in an interactive case study that includes the documentation and effectiveness testing requirements for use of hedge accounting.
  • Comply with the extensive disclosure requirements for financial instruments.

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The Third Basel Accord was issued in December 2017. It applies a global framework for banking regulation and was developed in stages (Basel III (original) plus Basel IV) prior to and in response to the 2008 financial crisis

Although “soft law”, the Accord nevertheless constitutes the global, regulatory standard on bank capital adequacystress testing and liquidity. Specifically designed to enhance bank and banking sector stability, the Accord materially impacts banking business models. It is therefore a given that people working in banks and financial institutions have an awareness of the content of the Accord and its implications for the business of banking.

The Third Basel Accord is being introduced into EU law through the Capital Requirements Regulations (CRR I and II) and the Capital Requirements Directives (CRD IV and V).

Our course starts with a brief overview of the background to bank prudential regulation to refresh participants knowledge of the key drivers behind the introduction and development of the Basel Accords

This is followed by:

  • a high level overview of the structure of prudential regulation;
  • a detailed examination of each of the main topic areas, these being capital, risk weighted assets, leverage and the liquidity standard;
  • an interbank comparison of latest Pillar 3 metrics.

The course then considers the extra regulations applicable to global systemically important banks (G-SIBs). This will involve a review ofthe Financial Stability Board’s TLAC standard for globally systemically important banks (G-SIBs)

The final part of the course examines the rules applied by the EU Bank Recovery and Resolution Directive.

Whilst this course will contain some numerical examples and illustrations it will avoid becoming bogged down in the detailed mathematics of financial risk management. Although a technical overview the main aim of the course is to provide a clear line of sight through to the business implications for banks implementing and working within the regulatory framework of the Third Basel Accord.

Learning Objectives:

  • Minimize the learning curve for getting up to speed on Basel
  • Gain an appreciation the major technical differences between the old and new rules
  • Evaluate the significant impact of these differences through the use of real-world Pillar 3 disclosures
  • Providing a framework for understanding how the Basel rules work in practice

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