The most important aspects of changes in international accounting standards are given below with the periods from which they run.
INTERNATIONAL ACCOUNTING STANDARDS IN FORCE FROM 2014
As already reported in the 2013 Annual Report, which may be consulted for full details, the provisions of Regulation EU 1254/2012 have come into force during the current year which, with regard to the most important aspects, have:
- introduced IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint arrangements” and IFRS 12 “Disclosure of interests in other entities”; and also
- amended IAS 27 “Consolidated and separate financial statements” renamed IAS 27 “Separate financial statements” and IAS 28 “Investments in associates”;
substantially inserting changes to the rules for the preparation of and compulsory disclosures for consolidated and separate financial statements.
The impact analysis carried out by the UBI Banca Group, in order to determine possible changes to the scope of consolidation regarded, as far as concerns the most important aspects, interests held in “banc assurance”5 companies and it led to the conclusion of joint control pursuant to IFRS 11, with regard to the following investments:
• Aviva Vita;
• Aviva Assicurazioni Vita; and
• UBI Assicurazioni,
previously recognised in accordance with IAS 28 as investments subject to significant influence6.
Furthermore, the consolidation methods provided for by IFRS 11 do not determine any changes in the consolidated financial statements of the UBI Banca Group with respect to the treatment employed until 31st December 2013 in accordance with IAS 28, as the investments in question continue to be accounted for according to the equity method.
As concerns the partnership with the Cattolica insurance Group (Lombarda Vita Spa), the analysis carried out led to the identification of a situation consisting of investments in companies subject to significant influence in accordance with IAS 28.
Consequently, the main changes introduced regard changes in the financial statements as at and for the period ended 31st December 2014 resulting from the introduction of IFRS 127.
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The provisions relating to the following EU regulations come into force in the current year, the adoption of which has no substantial effect on the financial statements of the UBI Banca Group:
Regulation EU 1256/2012, amends IAS 32 “Financial instruments: presentation” in order to provide additional guidelines to reduce inconsistencies in the practical application of the standard on the question of offsetting financial assets and liabilities;
Regulation EU 313/2013 amends IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint arrangements” and IFRS 12 “Disclosure of interests in other entities” in order to clarify the intentions of the IASB when it first published its guide to the transitional
5 The reference is to the companies Aviva Vita Spa, Aviva Assicurazioni Vita Spa, Lombarda Vita Spa and UBI Assicurazioni Spa. 6We report, with regard to the above-mentioned conclusions on the banc assurance partnership with the Aviva Group, that these could
be subject to modification following the definition of agreements provided for by new contractual commitments undertaken with the Aviva Group with particular regard to current relationships concerning governance.
7
To complete the information we report that with regard to the analyses carried out on the special purpose entities (SPEs) with which the Group holds business relations, these are all entities formed as part of securitisation operations.Consequently, these entities are already included in the scope of consolidation as at 31st December 2013 in accordance with IAS 27 and SIC 12, then in force, in line also with the provisions of IFRS 10.
provisions of IFRS 10 and to make the changeover to the new standards less burdensome by limiting the obligation to provide adjusted comparative information to just the previous comparative period;
Regulation EU 1174/2013 amends IFRS 10 “Consolidated financial statements”, IFRS 12 “Disclosure of interests in other entities” and IAS 27 “Separate financial statements” in order to specify that “investment entities” measure their investments in controlled companies at FVTPL instead of consolidating them;
Regulation EU 1374/2013, which endorses “recoverable amount disclosures for non- financial assets”, makes amendments to IAS 36 “Impairment of assets” to clarify that the information to be provided on the recoverable amount of the assets, when the value is based on the fair value net of disposal costs, regards only those assets that have reduced in value;
Regulation EU 1375/2013 which adopts “Novation of derivatives and continuation of hedge accounting” makes amendments to IAS 39 “Financial instruments: recognition and measurement” designed to regulate situations where a derivative designated as a hedge is subject to novation from one counterparty to a central counterparty as a consequence of laws or regulations. The hedge accounting may therefore be discontinued regardless of the novation, a possibility not allowed without this amendment.
INTERNATIONAL ACCOUNTING STANDARDS IN FORCE SUBSEQUENT TO 2014
On 13th June 2014, the European Commission endorsed regulation EU 634/2014 which made the introduction of IFRIC 21 “Levies” compulsory as of the 2015 financial statements.
The document in question addresses the accounting treatment for a liability relating to a levy where the liability is covered by the application of IAS 37 “Provisions, contingent liabilities and contingent assets”. It clarifies aspects of interpretation considered problematic with regard to the payment of a levy for which the timing and the amount are uncertain.
AMENDMENTS TO IAS39
On 24th July 2014 the IASB issued the accounting standard IFRS 9 “Financial Instruments”, which therefore brought to conclusion a process consisting of three stages “classification and measurement”, “impairment” and “general hedge accounting”, which fully revised IAS 39 “Financial Instruments: Recognition and Measurement”.
While according to the standard, compulsory adoption is set for 1st January 2018, it will now be subject to a process of endorsement by the European commission and will only become actually applicable in member countries of the EU on conclusion of that process.
For full information we report that last April the IASB published the discussion paper “Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging” which, in line with the dynamic procedures for the management of interest rate risk adopted by banks, sets out a possible accounting approach (a “portfolio revaluation approach) designed to better reflect the dynamic management of risk by management in the financial statements of an entity.