Intesa Sanpaolo Chooses Bloomberg IFRS 9 SPPI Data

 Intesa Sanpaolo Chooses Bloomberg IFRS 9 SPPI Data
03.04.2017 12:45 pm

Intesa Sanpaolo Chooses Bloomberg IFRS 9 SPPI Data

Security and Compliance

Bloomberg announced today that Intesa Sanpaolo, the Italian banking group, is using accounting data from Bloomberg to comply with the International Financial Reporting Standard 9, known as IFRS 9, an accounting framework released by the International Accounting Standards Board (IASB).

Intesa is the latest financial services organization to choose Bloomberg's IFRS 9 Solely Payments of Principal and Interest (SPPI) data to determine how securities should be classified under the new accounting standard. Accounting and reporting departments can use Bloomberg's IFRS 9 SPPI data to systematically classify securities and conclude whether they pass or fail the SPPI test.

IFRS 9 will replace the existing IAS 39 accounting standard that prescribes how financial organizations should classify and value financial instruments on a current and ongoing basis. The new guidelines are designed to bring greater transparency and consistency to financial instrument accounting practices when they take effect in January 2018. The guidelines also necessitate more descriptive security-level data to reach an informed conclusion about how they should be classified and valued.

"The IFRS 9 SPPI requirements present a tremendous challenge because they require a data-intensive review of investment and loan portfolios to determine how securities should be treated," said Chris Casey, Global Head of Regulatory and Reference Data at Bloomberg. "To comply with confidence, organizations need high-quality instrument data and a comprehensive methodology that allows them to accurately and defensibly perform this analysis on an ongoing basis."

Nicola Torresani Head of Debt Pricing and Analysis at Intesa Sanpaolo said, "Using Bloomberg's IFRS 9 SPPI in our accounting process will help us classify portfolio securities accurately and consistently across our organization. We also expect it will save us time and resources required to evaluate how our investments should be treated under the new standard. Bloomberg delivers high-quality data in a form we can readily use to assess the impact of the new rules on our accounting, reporting and risk management processes. We feel confident in the analysis performed by Bloomberg's product and the methodology that drives it."

The new IFRS 9 classification and measurement model requires an assessment of whether a financial asset's contractual cashflows are solely payments of principal and interest, or SPPI. This SPPI test is done to identify whether an instrument has non-basic features and is presented at fair value, instead of using the effective interest method. 

Making this determination on an instrument-by-instrument basis requires tremendous manual effort, as the prospectuses and legal documents for each financial asset must be reviewed individually and thoroughly to identify potentially non-SPPI features or cashflows. In order to properly assess and conclude the SPPI test, and the resulting classification and measurement of an investment portfolio, IFRS filers need to assess SPPI characteristics at a security level on a large scale. This analysis requires a large amount of descriptive data and the ability to organize this data in logical rule sets.

Bloomberg's IFRS 9 SPPI data automates the process of performing the SPPI test and was developed in collaboration with a number of key industry stakeholders to deliver an industry standard SPPI classification.

The IFRS 9 SPPI solution is part of Bloomberg's Regulatory and Accounting Product suite, which assists senior compliance officers at banks, asset managers, insurers and other financial organizations navigate an increasingly complex regulatory and accounting disclosure environment. 

Related News

Wolters Kluwer Compliance Solutions Issues US IRS Guidance

Wolters Kluwer’s Compliance Solutions business has issued guidance about recently announced US relief measures in light of COVID 19. Last week the US Internal Revenue Service (... Read more »

Wolters Kluwer Grows Minnesota Staff by 25%

Global technology solutions provider Wolters Kluwer has been quietly expanding its Minnesotan HQ for its award winning Compliance Solutions business and other businesses that... Read more »

CFPB Takes Key Steps To Prevent Consumer Harm

The Consumer Financial Protection Bureau (Bureau) today announced three steps to advance its strategy on one of its key priorities: preventing consumer harm.

Read more »

FCA Censures Crypto Exchange BitMex

We believe this firm has been providing financial services or products in the UK without our authorisation.

Find out why to be especially wary of dealing with this... Read more »

TradeTech 2020: Innovation and Transformation in the New Decade

With 2020 dawning in a matter of months, the start of a new decade provides an opportune time to reflect on the evolution of the equity-trading market: What will it take for... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel