Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
Amendments to IAS 19 Defined benefit plans:
Employee Contributions
The objective of this amendment is to simplify and clarify
the administrative processing of employee contributions or
contributions from third parties in relation to defined benefit
pension plans. This amendment has no impact on profit or
equity and took effect on 1 January 2016.
Amendments to IAS 1: Disclosure initiative
The purpose of the amendments was to achieve a more
efficient provision of information and to encourage companies
to seek professional advice for determining which information
needs to be provided in the annual financial statements when
they apply IAS 1 .This amendment has no impact on profit or
equity and took effect on 1 January 2016.
Amendments to IAS 16 and IAS 38: Clarification of
Acceptable Methods of Depreciation and Amortisation
On 12 May 2014, the International Accounting Standards
Board (IASB) published amendments to IAS 16Tangible fixed
assets and to IAS 38 Intangible assets.These amendments
were introduced under the title Clarification of acceptable
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 11: 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 credit losses
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 credit losses 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
258 Rabobank Annual Report 2015