Risk and Compliance
Asseco 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.
Get ready for IFRS 9 on time & with minimum effort!
Although mandatory implementation of IFRS 9 is just around the corner, it is still possible to meet the target easily, efficiently and without falling behind. Wondering how? With a firm plan, commitment of resources, and collaboration between Risk and Finance. Bearing this in mind, Asseco SEE has developed a solution designated to facilitate your transition to IFRS 9 and assist you in conducting necessary processes and generating reports in line with the regulatory requirements. Our experienced professionals are ready to help you understand the impact of the new standard, guide you through the implementation process and support the requirements of your specific internal methodology.
Main advantages of Asseco IFRS 9 Impairment Solution:
- Complete impairment cycle
- Highly flexible system
- Stand-alone application
IFRS 9 Challenges
The future introduction of IFRS 9 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 Asseco 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.
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. Asseco 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.
EIR and interest income calculation.
Future rules demand that interest income arising from a financial instrument is recognized in accordance with the credit quality of that instrument. The application supports calculation of EIR from contractual cash-flows and interest income net of impairment for defaulted and gross of impairment for non-defaulted exposure in order to comply with the Standard.
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.
New segmentation of portfolio requires adequate evidence in bank’s books. Asseco 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 Asseco 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
- Manual corrections
- Different approach for group and individual significance
EIR and Interest income calculation
- Calculation of EIR from cash flows
- 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
Asseco 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.