Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Impairments - Expected impact
With the introduction of IFRS 9 allowance levels will increase
mainly due to the fact that not only incurred losses are to be
reported but also expected losses (Stage 1 one year and Stage 2
lifetime).This subsequently also will lead to a decrease in equity
(net of tax).The estimate of the increase will have a net negative
effect on IFRS equity of EUR 0.2 billion (net of tax).
Expected impact on CET1 ratio
The total decrease in IFRS equity due to the introduction
of IFRS 9 will be approximately EUR 0.1 billion and is the
basis for defining the impact on CET1 ratio.The change in
accounting for the callable notes will not have an impact on
CET1 because of prudential filters.The impact on equity due to
impairments will be compensated by the existing IRB-shortfall.
The total impact on CET1 ratio will therefore be limited and is
estimated as 15 basis points negative.This impact assessment
has been estimated under an interim control environment.
The implementation of the comprehensive end state control
environment will continue as Rabobank introduces business
as usual controls throughout 2018 which might change the
impact materially.
In order to reduce the potential impact of IFRS 9 expected
credit losses on capital and leverage ratios during the transition
period (i.e. 1 January 2018 until 31 December 2022), the EU
adopted on 12 December 2017, Article 473a CRR. Rabobank
assessed the advantage to apply this transition arrangement
and concluded that it has no significant benefits and that
market participants will look through these transition measures.
Therefore it has chosen not to apply for the transitional
arrangement.
Amendments to IFRS 4
The amendments to IFRS 4 permit entities that predominantly
undertake insurance activities the option to defer the effective
date of IFRS 9 until 1 January 2021 .The effect of such a deferral
is that the entities concerned may continue to report under
IAS 39 Financial Instruments: Recognition and Measurement.
IAS 28 Investments in associates and Joint Ventures require an
entity to apply uniform accounting policies when using the
equity method. Nevertheless, for annual periods beginning
before 1 January 2021, an entity is permitted, but not required,
to retain the relevant accounting policies applied by the
associate or joint venture as follows: (a) the entity applies IFRS
9 but the associate or joint venture applies the temporary
exemption from IFRS 9; or (b) the entity applies the temporary
exemption from IFRS 9 butthe associate or joint venture applies
IFRS 9. These amendments are effective for annual periods
beginning on or after 1 January 2018.
Rabobank will apply IFRS 9 as of 1 January 2018. Achmea BV, an
associate of Rabobank, undertakes insurance activities and uses
the option to defer the effective date of IFRS 9. Rabobank uses
the temporary exemption to not apply IFRS 9 when measuring
Achmea BV according to the equity method.
IFRS 15 Revenue from Contracts with Customers
This standard is effective for annual periods beginning on or after
1 January 2018 with early application permitted. IFRS 15 provides
a principles-based approach for revenue recognition, and
introduces the concept of recognising revenue for obligations as
they are satisfied.The standard should be applied retrospectively,
with certain practical expedients.The standard does notapplyto
financial instruments, insurance contracts or lease contracts.
The assessment of Rabobank is that this new standard only
has a small impact on the revenue recognition of property
developments in Germany where it is possible to recognise
revenue during the term of the contract. This has no significant
impact on profit or equity for Rabobank.
IFRS 16 Leases
In January 2016, the IASB issued IFRS 16 'Leases'with an
effective date of annual periods beginning on or after 1 January
2019. IFRS 16 results in lessees accounting for most leases
within the scope of the standard in a manner similar to the
way in which finance leases are currently accounted for under
IAS 17'Leases'. Lessees will recognise a'right of use'asset and
a corresponding financial liability on the balance sheet.The
asset will be amortised over the length of the lease and the
financial liability measured at amortised cost. Lessor accounting
remains substantially the same as in IAS 17. Rabobank is in the
process of assessing the impact of IFRS 16. As Rabobank is to a
certain extent lessee of property and equipment the contingent
liabilities relating to operational leases will lead to a right of use
asset in the statement of financial position.
Amended standards issued by the IASB and adopted
by the European Union which applies in the current
financial year
Amendments IAS 7 and IAS 12
The amendments to IAS 7 Statement of Cash Flows are
intended to clarify IAS 7 to improve information provided
to users of financial statements about an entity's financing
activities. Information about changes in liabilities arising
from financing activities are disclosed in section 34.
The amendments to IAS 12 Income Taxes aim to clarify how
to account for deferred tax assets related to debt instruments
measured at fair value. Both amendments have an effective date
of annual periods beginning on or after 1 January 2017 and will
not have an impact on profit or equity.
Rabobank Annual Report 2017 - Consolidated financial statements
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