New Reporting: Local GAAP and individual Banks are mandated to report FINREP
So far the FINREP has been mandatory only for establishments using the IFRS accounting standards on consolidated financial reports. The FINEREP reporting requirements are now extended to instutions reporting under Local GAAP and on individual level. Depending on several factors, reporting scope and frequency may vary.
The aim of the extended reporting requirements is to create a standard for the simple exchange of financial data within Europe. This will facilitate the supervision of the European financial market by the European Banking Authority (EBA).
FINREP, which has been designed for institutions that use IFRS for consolidated financial statements, from now on, has to be reported by the institutions that use the national financial reporting standards for accounting purposes. In addition to parent companies, FINREP will also be required of subsidiaries and branches.
There are four levels of reporting: Full FINREP, Simplified FINREP, Oversimplified FINREP and Data Points. Data Points include the following reporting sheets:
- 1 Balance Sheet Statement [Statement of Financial Position]
- 2 Statement of profit or loss
- 5 Breakdown of Loan and advances by product
- 8 Breakdown of financial liabilities
- 10 Derivatives - Trading
- 11 Derivatives - Hedge accounting
- 18 Information on performing and non-performing exposures
- 19 Information forborne exposures
In addition to the 8 reporting sheets included in the Data Points, the Oversimplified FINREP contains the following reporting sheets:
- 4 Breakdown of financial assets by instrument and by counterparty sector
- 9 Loan commitments, financial guarantees and other commitments
- 12 Movements in allowances for credit losses and impairment of equity instruments
- 14 Fair value hierarchy: financial instruments at fair value
The Simplified FINREP also contains:
- 6 Breakdown of loans and advances to non-financial corporations
- 13 Collateral and guarantees received
- 16 Breakdown of selected statement of profit or loss items
- 17 Reconciliation between Accounting and CRR scope of consolidation: Balance Sheet
- 20 Geographical breakdown
- 40 Group structure
Full FINREP contains additional 12 FINREP reporting sheets.
Financial institutions are classified into ‘significant’ and ‘less significant’. Significant establishments have to be supervised directly by the European Central Bank and report more documents than the less significant. The institution is significant if it meets one of the following four criteria:
- The balance sheet total amounts to more than EUR 30 billion.
- The balance sheet total more than EUR 5 billion and amounts to more than 20% of the GDP.
- The cross-border assets/liabilities amount to more than 20% of the total assets/ liabilities.
- The supervisor classifies the institute as relevant.
The following reports filed by the relevant institutions must include FINREP, regardless of national accounting regulations:
- Reports from consolidated (sub) groups.
- Reports from individual institutions that are not part of a group.
- Branch offices in one of the SSM-participating member states of the institutions based in non-participating EU member states.
Individual reporting by relevant (sub) group parent or subsidiary on the individual institution level report a simplified FINREP. Individual reporting by a subsidiary in a non-participating EU member state: oversimplified FINREP.
The consolidated group reporting for ‘less significant’ groups must include full FINREP only if it is reported in IFRS. Otherwise, if the balance sheet total amounts to less than EUR 3 billion, only the Data Points are reported, or the simplified FINREP. An exception here is individual reporting of parent companies or subsidiaries at the individual institution level: if the balance sheet total amounts to more than EUR 3 billion, the company files oversimplified FINREP.
The companies have to report quarterly, semi-annually or annually. The EBA offers to download a document that contains a list of individual FINREP tables according to appx IV of the execution regulation 680/2014 grouped by reporting frequency. The Central Bank of Germany (Deutsche Bundesbank) has already published the corresponding taxonomies for reporting.
The companies have to face the challenge of identifying which values have to be reported and which left out due to IFRS reference (from the German accounting point of view). The Central Bank of Germany (Deutsche Bundesbank, Arbeitskreis BaFin) offers an Excel visualisation, based on the appx IV; this document contains every single cell of all FINREP tables. The cells containing the values that are irrelevant for German reporting process are marked in this list. The document can be downloaded from the homepage of the Central Bank of Germany (Deutsche Bundesbank).
AMANA is currently working on a tool for identification of EBA validation rules that cannot be fulfilled due to the assessment of the Central Bank of Germany. Such validation rule arises when the value in one cell equals the sum of values of several other cells. Such a rule is impossible to fulfil if all summands are cells that cannot be reported from the German perspective, while the sum has to be reported.
The validation rule tool is a part of the AMANA XBRL Cloud.
For more information on the AMANA XBRL Portal.