FRSGlobal

The Committee of European Banking Supervisors (CEBS) has increased its influence on regulatory reporting within their member states by launching the next step in the harmonisation of all major reporting in both the Financial Reporting (FinREP) and Common Reporting (CoREP) frameworks - designed to streamline reporting requirements for supervised institutions.

FinREP, which is not mandatory, is designed for application by credit institutions when preparing the supervisory financial returns under IAS/IFRS required by their national supervisory authority. Each national supervisor remains free to apply the framework to supervised credit institutions within its own jurisdiction.

The aim of FinREP is to harmonise financial reporting within all the member states in order to improve comparability. However since implementation it has become apparent that, with so many national discretions, this goal is proving illusive.

Further major changes to the accounting standards are expected which will impact FinREP. CEBS will review the revised FinREP in due course to take account of the changes that may arise in IAS 39, as well as IAS 1.

The application date of the revised FINREP is 1st January 2012 and CEBS expects the first reporting date to be 31st March 2012.

In December 2009 CEBS published revised guidelines on Financial Reporting and the main features of the revised guidelines are as follows:

• Application: CEBS recommends that the guidelines should be applied by all supervisors in the member states and a strong “comply or explain” clause has been introduced in the guidelines in order to enhance their implementation and give transparent reasoning for their non-application.
• Maximum data model: When applied, FinREP will be the only consolidated financial reporting for prudential supervision by individual banking groups. The revised guidelines ask for a firm commitment from local regulators to apply this principle.
• Reduced templates: FinREP’s maximum data model comprises 2 sets of templates: 2 CORE templates, which must be implemented by all national jurisdictions, and 23 NON-CORE templates which can be implemented at the discretion of national jurisdictions.
• A streamlined reporting package: A net reduction in the global reporting burden for supervised institutions. For example, the number of templates included in FinREP is reduced from 39 to 25.
• Scope of consolidation: The CRD scope of consolidation will be applied to all FinREP templates.
• Frequency and remittance dates: The maximum frequency will be quarterly reporting, keeping the option for supervisors to ask for less frequent reporting.
• IAS/IFRS amendments: In order to avoid redundant and costly IT system changes, CEBS will take into account agreed changes to IAS/IFRS before starting to implement the revised FinREP framework (in particular, the recent IASB project on IAS 39 replacement and the proposal on IAS 1).