IFRS 9 and Other Agenda Topics for Your Financial Training
IFRS 9 and Other Agenda Topics for Your Financial Training

IFRS 9 and Other Agenda Topics for Your Financial Training

The Financial Services Industry is “Special”

Interpret “special” however you see fit (given the events of the recent past)! But for the accounting profession, the issues impacting banks, insurance companies, and investment management funds are often unique — and uniquely complex. Annual financial training for these industries should be unique and tailored to the specific issues facing them, such as the impacts of the new impairment and hedging models within IFRS 9 or recent regulatory scrutiny impacting the industry. Sadly, more often than not, financial training for these industries falls short.

For many accountants in the financial sector, annual accounting training serves to secure those much-needed CPE hours. However, often it only adds to the mounting stress of their endless to-do list as they sit and endure a presentation on marginally relevant topics. This scenario may sound like a necessary evil for those wishing to keep their license active, but it does not have to be this way. Accounting training should be an investment made by both the individual and their employer, and just like any other investment; the goal should be a return on investment.

While this scenario may stir up bad memories of a previously attended training, let me assure you that the experience is not any better from our perspective! The best training is one that is both relevant and timely. As a facilitator, there is nothing more rewarding than to feel that you have provided information and skills that that participants can use on the job.

The best financial training is relevant, geared specifically to the issues facing your industry and your company. Regardless of whether it is baseline training or an annual update, designing your agenda with the audience in mind ensures the training is relevant and a worthwhile investment.

But relevant content only gets you so far. Effective training is also practical and engaging. All too often at a training, presenters wind themselves up and go into lecture mode with participants hunkering down for a day of hibernation. To really learn, participants need to apply critical thinking by putting themselves into real-life practical situations. This approach fosters better recall and a deeper understanding of the subject matter. Good training requires application and problem solving, putting participants in scenarios and having them think about how to address the issues presented. Facilitators (calling them “presenters”does not do their role justice!) assist participants in navigating issues, contemplating alternatives, and establishing consensus for why standards setters have settled on particular conclusions for proper accounting and measurement.

I find that this approach not only keeps participants engaged throughout the day, but also creates a deeper understanding of the issues. Plus it is FUN for everyone in the classroom!

Below is a high-level example of what I believe to be a more enticing and useful agenda for an accounting and reporting update under IFRS for those in the financial services industry.

Introduction and Refresher

Not just your “Welcome to the course, my name is…” kind of introduction, but one that sets the tone for the rest of course by getting participants immediately engaged. How? A series of mini cases and class discussion focused on accounting and reporting issues impacting financial services entities such as those dealing with:

  • Foreign currency transactions and translations
  • Held-to-maturity financial instruments and an increase in transfers into this category
  • Business combinations and findings from the post-issuance review by the International Accounting Standards Board (IASB)
  • Fair value measurement versus historical cost, including points raised by the Chairman of the IASB on the subject

This section concludes with a snapshot of the IFRS standards and IFRIC interpretations effective for the first time in 2015 and a look ahead to 2016 and beyond.

IFRS 9 Financial Instruments

The financial instruments standard is not new, but our understanding of its impacts as we near its mandatory effective date is continuously evolving. Assuming the audience is already familiar with the fundamental changes within IFRS 9, the course should focus on implementation and banking-specific issues such as:

  • Applying the “solely payments of principal and interest” (SPPI) concept to unique banking products
  • Determining loan losses under the new impairment model
  • Accounting and reporting of purchased credit impaired (PCI) loans
  • Implementing hedge accounting strategies under the new and more “relaxed” hedging guidelines

In addition to understanding the requirements of IFRS 9, class discussion should also focus on the operational aspects of these changes, such as:

  • Technology,
  • Internal controls,
  • Regulatory reporting, and
  • Communications.

IFRS 15 Revenue From Contracts With Customers

Revenue recognition? I thought this was a course tailored to financial institutions! Believe it or not, financial institutions are impacted by the new revenue recognition standard. However, a generic IFRS update course would not delve into specifically how this standard affects transactions entered into by financial services entities. Ours does!

Other Recent Standards and Interpretations

Although of less concern compared to IFRS 9 or IFRS 15, some recent amendments to other standards affect banks and other financial institutions. Therefore, we briefly cover these issuances in this section to complete the loop on the IASB’s latest activities. This section concludes with a look toward the future, providing a snapshot of the most recent IASB Work Plan, highlighting projects with the most significant impact to the industry.

Activities of the IFRS Interpretations Committee (IFRIC)

Whether recently issued interpretations or agenda decisions accepted or rejected by the IFRIC, practitioners can learn a lot about applying IFRS. We examine recent issues that impact financial institutions such as:

  • Fair value measurement
  • Uncertain tax positions
  • Joint arrangements
  • Negative yield investments

IFRS Practice Issues Identified By Regulators

Sometimes the best way to stay out of trouble is to learn from other’s mistakes! In this section, we examine enforcement actions and issues identified by regulators such as the European Securities and Market Authority (ESMA) and the Securities and Exchange Commission (SEC) in order to:

  • Identify accounting and reporting issues in the financial services industry, and
  • Reinforce the proper treatment under IFRS.

So for all those in the financial services industry, take pride in the fact that you are “special”and “different.” Demand your training be relevant and tailored to your industry. Demand it increase your job performance and provide a return on your investment. Demand it be engaging and fun. Life’s too short for bad training!

IFRS Update
 
IFRS 9 Webinar Series

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