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31

Mar, 2016

Target Operating Model – Engaging with the Auditors early

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As the methodologies for IFRS 9 Implementation are still evolving, many banks are in the process of developing a roadmap towards implementation and are still evaluating methodologies that are likely to conform to the principles of proportionality and materiality. To meet the January 2018 deadline, several banks will not be able to embrace a textbook implementation, and will have to adopt practical approaches to several principles espoused in the guidelines. In our blog ‘Impairment Modelling – No silver bullets’, we spoke about the options that banks have with respect to […]

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25

Mar, 2016

Impairment Modelling

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The new standard on financial instruments accounting – IFRS 9 has significantly transformed banks’existing impairment assessment to address concerns about “too little, too late” provisioning for loan losses.In our previous blog i.e. “Stage Assessment – Devil is in the detail” we discussed how lifetime PDs are used for stage assessment of instruments, apart from other nuances of assessing significant deterioration of credit quality. Entities are required to recognise an allowance for either 12-month or lifetime Expected Credit Losses (ECLs), depending on whether there has been a significant increase in credit […]

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9

Mar, 2016

Stage Assessment – Devil is in the Detail

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In our second post ‘building blocks of Impairment Modeling’, we had highlighted that IFRS 9 uses a ‘three stage model’ for measurement of ECL, and one of the major challenges of implementing this model was tracking and determining whether there has been a significant increase in risk of a credit exposure since origination. This blog post delves into the intricacies related to the three stage model, and some nuances that need to be considered for a bank looking to implement IFRS 9.

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4

Mar, 2016

IFRS 9 IT Architecture

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As the race against time to comply with IFRS 9 guidelines begins, several software solutions are being bandied about as a quick fix solution for automating the entire impairment modelling process. While automating is definitely the way to go in initiatives such as these, the question remains as to whether the software architecture should be of a strategic integrated nature or one that is decoupled and modular.

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