Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Adoption and Implementation of IFRS in the Regional Banking Sector : Key Challenges


Published on

Presentation at the "IASB Middle East Policy Forum" - May 2008

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

Adoption and Implementation of IFRS in the Regional Banking Sector : Key Challenges

  1. 1. Emirates NBD Middle East Policy Forum Adoption & Implementation of IFRS in the Regional Banking Sector : Key Challenges Sanjay Uppal Group Chief Financial Officer Emirates Bank Dubai. 13 May 2008
  2. 2. Key challenges : IAS IAS 1 : Presentation of Financial Statements Insight vs. Information overload Information Recipients – relevance & use IAS 39 : Financial Instruments – Recognition & Measurement Liquidity Issues / Free Float Fair Value vs. Fire Value Aggravated Credit Meltdown Securitization Issues Fair Valuation of Debt ? 1
  3. 3. Key challenges : IAS IAS 19 : Employee Benefits Limited Actuary capabilities in the market IAS 20 : Accounting for Government Grants & disclosure of Govt Assistance Inconsistent adoption Disclosure Requirements / robustness 2
  4. 4. Key challenges : IAS IAS 24 : Related Party Disclosures Sovereign Ownership IAS 40 : Investment Property Valuation challenges in the Region Fair Value ? Inconsistencies amongst Banks 3
  5. 5. Key challenges : IFRS IFRS 3 : Business Combinations Share f Share E h Sh for Sh Exchange Deterrent to domestic consolidation ? Proforma / Business Combination – Investor Communication Valuation of Core deposit Intangible - ‘Hot Money’ Pooling of Interest ? IFRS 7 : Financial Instruments - Disclosures Insight I i ht vs. Information overload I f ti l d Information Recipients – relevance & use 4
  6. 6. Key challenges : Others Property Companies & Businesses Percentage of Completion vs. Completed Contracts True Value of Company ? fC Islamic Banking IAS & IFRS adoption ? Banking business vs. Private Equity vs. Asset Management Opinion difference in Sharia Boards Consolidation of strategic equity participations & private equity i t C lid ti f t t i it ti i ti i t it interests t Previously recognized on the basis of equity accounting Consequence for those banks which actively engaged in p q y g g private equity q y 5
  7. 7. Key challenges : Others Board of Directors buy-in & support Legacy systems Awareness : Under-estimation of effort requirement Data gaps : New data requirements Materiality : Definition Conflicts with other projects (e.g. Basel II) Acceptance of change in the institution Knowledge transfer & training IFRS interpretation issues & market inconsistencies p Resource availability : Skill & experience Regulatory environment 6