Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
depreciation methods. As there are various different practices,
it needs to be clarified whether it is appropriate to implement
methods based on revenues for the calculation of the
depreciation of an asset. This amendment has no impact on
profit or equity and took effect on 1 January 2016.
Amendments to IFRS 17: Accounting for Acquisitions of
Interests in Joint Operations
These amendments offer new guidelines on the administrative
processing of an acquisition of an interest in a joint business
operation, where this operation of the joint business operation
constitutes a company.This amendment has no impact on
profit or equity and took effect on 1 January 2016.
Improvements to International Financial Reporting
Standards cycle 2012-2014
On 25 September 2014, the International Accounting Standards
Board (IASB), in the context of its periodic improvement
process, which is intended to streamline and clarify standards,
proceeded to publish the Annual improvements in International
Financial Reporting Standards cycle 2012-2014 ('the annual
improvements'). The objective of the improvements is to
address non-urgent, but necessary issues, discussed by the
IASB during the project cycle, on areas of inconsistencies
in International Financial Reporting Standards (IFRS) and
International Accounting Standards (IAS) or ambiguous
wording.These improvements have no impact on profit or
equity and took effect on 1 January 2016.
New standards issued by the IASB, but not yet
endorsed by the European Union
IFRS 9 Financial Instruments
In July 2014, the IASB published IFRS 9 Financial Instruments as
the replacement for IAS 39 Financial Instruments: Recognition
and Measurement.The new standard becomes effective on
1 January 2018.
Classification and measurement
Financial assets are classified and measured according to
the way in which they are managed by Rabobank as well
as by the type of contractual flows of cash in these assets.
Both determine whether they are included at amortised cost,
fair value with adjustments in the values thereof processed
through other comprehensive income ('FVOCI') or through the
profit and loss account ('FVTPL'). In many cases the classification
and measurement will be in line with IAS 39, but there are
deviations with respect to embedded derivatives and equity
instruments. There are almost no changes in the processing
of financial liabilities with exception to certain liabilities at fair
value where the results have to be included as equity because
of changes to Rabobank's credit risk.
Impairments
The rules governing impairments apply to financial assets
at amortised cost and FVOCI, as well as to lease receivables,
certain lending liabilities and financial guarantees. At the first
booking, a provision is taken to the amount of the expected
impairments from possible non-payment in the coming
12 months ('12-months expected credit loss'(ECL)). If the
credit risk increases significantly, a provision will be required
to the amount of the expected impairments from possible
non-payment during the expected term of the financial
asset ('ECL term'). In determining the amount of these
provisions IFRS 9 uses expected future credit losses whilst IAS
39 only looks at extraordinary impairments for which objective
evidence already exists. In this way, it is expected that the
extraordinary impairments will change pro-cyclically giving
more extreme results (both positive and negative). In addition,
the size of the provisions will be greater because under IFRS 9,
in addition to the current provision for posts already in default,
there is also a facility for all other financial assets equivalent to
the size of the 12-month ECL or period ECL.
Hedge accounting
The hedge accounting rules envisage simplifying hedge
accounting by establishing a closer link to the risk management
strategy and allowing a broader range of hedging instruments
and risks to be hedged. IFRS 9 does not explicitly address the
subject of macro-hedge accounting; this is seen as a separate
subject. In order to avoid a possible conflict between the
current practice of macro-hedge accounting and new hedge-
accounting rules, IFRS 9 provides the option of continuing to
use the current conditions governing macro-hedge accounting
from IAS 39.
Application
The rules governing classification, measurement and
impairments are applied retrospectively by amending
the opening balance sheet on 1 January 2018.There is no
obligation to amend the comparative figures. The outlook for
the hedge-accounting conditions is that they will come into
effect on 1 January 2018.
Expected impact
Rabobank has started making preparations for the
implementation phase.The main impact is expected to be on
loan impairments. It is not yet possible to reliably estimate the
potential impact. More clarity on this subject is expected in the
2016 financial statements.
179 Notes to the consolidated financial statements
