Risk and Compliance
Asee IFRS 9 Impairment Solution
Sophisticated risk management tool for identification and segmentation of credit risk in accordance with IFRS 9 and calculation of expected credit losses.
Implementation of IFRS 9 standard with minimum effort!
Although IFRS standard is complex and comprehensive , it is possible to meet the target easily, with minimum effort. Wondering how? With a firm plan, commitment of resources, collaboration between Risk and Finance and with the enormous experience we have gained during 22 successful deployments in 6 Southeast European countries. Our experienced professionals are ready to help you understand the impact of the IFRS 9 standard, guide you through the implementation process and support the requirements of your specific internal methodology.
Main advantages of Asee IFRS 9 Impairment Solution:
- Complete impairment cycle
- Highly flexible system
- Stand-alone application
IFRS 9 Challenges
IFRS 9 standard requires a more sensitive approach to identification of credit risk and complex impairment calculations that result in higher loan loss reserves. With the implementation of Asee IFRS 9 Impairment Solution, banks will be able to respond to regulatory changes adequately, monitor client portfolio effectively, and calculate expected losses in the most efficient manner.
Asee IFRS 9 Impairment Solution is an application comprised of modules. This feature gives an opportunity for the banks to use the functionalities of the entire application or only specific modules (Impairment module, Stage segmentation module…), depending on their methodology.
Portfolio segmentation and significant increase in credit risk.
Portfolio segmentation often requires use of an additional set of information, their combination and comparison, in order to determine a significant increase in credit risk. Our Solution offers parametrization that fully comes forth to different portfolio segmentation methodologies and reliably identifies a significant increase in credit risk.
The concepts of 12-month expected loss and life-time expected loss has made impairment calculation more sophisticated, with expanded scope of data to handle in the process, and stress in the increase of loss. Asee IFRS 9 Impairment Solution brings an option of historical data analyses from different and enlarged timeframes combined with expert judgment and future predictions in order to keep provision losses at the acceptable level.
Stage 3 Interest Income Calculation
Asee IFRS 9 Impairment Solution contains a module for calculating interest income on the net book value of loans for Stage 3 placements.The module calculates interest income after calculating allowance for impairment for the reporting month.
Reporting and audit traceability.
As the new methodology comprises enlarged scale and variety of different data, it is necessary to have reporting that clearly represents calculated results with the entire background of previous calculations. Our Solution keeps record of all inputs and outputs in the process and offers a set of business and control reports with a full overview of results and complete traceability.
IFRS 9 segmentation of portfolio requires adequate evidence in bank’s books. Asee IFRS 9 Impairment Solution enables posting on different levels of granulation via interface tables to the General Ledger, and it also offers the ability to transfer necessary information back to the Core applications.
Basic processes of Asee IFRS 9 Impairment Solution
- Import of enlarged scale and variety of data types
- Each session can have different parameterization
- Import from different environments (Core, DWH…)
- Parameterization of GL accounts
- Segmentation on pools
- Individual & group client segmentation
- Segmentation on stages
- User defined attributes
Calculation of impairment
- 12M and lifetime PD
- LGD, EAD and impairment
- Scenario analysis for individual significanceManual corrections
- Different approach for group and individual significance
Interest income calculation for Stage 3
- Interest income calculation on net principle for S3
- Results overview
- Business and control reporting
- Records of all input and output
- Full audit traceability
- Impairment, interest income and posting to GL
- Different levels of granulation
- Data transfer to Core
Asee IFRS 9 Impairment Solution is an application which consists of modules. This feature gives an opportunity for the banks to use functionalities of the entire application or only specific modules (Impairment module, Stage segmentation module, etc.), depending on their methodology.