IFRS 15 Benchmarking survey for financial services

EY benchmarking survey for
financial services
IFRS 15 Revenue from Contracts with Customers
January 2017

Executive summary
Participants
profile
► 17 financial institutions (16 banks and 1 stock exchange)
► 16 participants in Europe and one in Japan which is implementing the project globally
► Revenues in scope:
► Less than £1bn: 4 participants
► £1bn – £5bn: 5 participants
► More than £5bn: 8 participants
► In July, 2016, the European Securities and Markets Authority (ESMA) issued a Public Statement (‘Issues for
consideration in implementing IFRS 15: Revenue from Contracts with Customers’) in order to promote consistent
application of IFRS 15 Revenue from Contracts with Customers in the European Union (EU).
► The Public Statement covers four broad topics: transparency on implementation and effects of IFRS 15; specific
considerations; illustrative timeline and good practices of disclosures; and next steps.
► ESMA expects the Public Statement to be taken into account in the 2016 annual financial statements and beyond
to enhance comparability of IFRS financial statements in the EU.
► In order to determine the consistency in the application of IFRS 15, EY conducted a benchmarking survey to
understand what information financial institutions, and especially banks, are planning to disclose in their financial
statements leading up to the implementation of the new standard, as well as the current status of their
implementation projects.
The survey
► Participants expressed a preference for the modified retrospective transition method, although some have not yet
selected a transition method.
► All, but one, of the participants plans to adopt IFRS 15 for annual periods starting on or after 1 January 2018.
One participant is considering early adoption in 2017.
► Most participants do not expect to provide quantitative disclosures on the estimated impact of IFRS 15 in their
2016 annual financial statements as they do not expect the impact to be material.
► Business lines and products where the impact is expected to be more significant include:
► Wealth and asset management (performance fees)
► Trade execution / broker services (including trail commissions)
► Engagement and communication with the audit committee and external auditors has been only partial so far and
EY is expecting it to increase as the effective date of the new standard approaches.
Overall
state of
readiness
EY IFRS 15 benchmarking survey for financial services, January 2017

Geographic representation of the survey
participants
UK, 10
Switzerland,
2
Spain, 1
France, 2
Germany, 1
Japan, 1

Content
1 Transition 4
2 Governance 5-8
3 Implementation 9-11
4 Disclosures 12-15

CommentaryData
1. Transition
Adoption date and transition approach
Almost all participants plan to adopt IFRS 15 as at the
mandatory effective date
► All, but one, of the participants plans to adopt IFRS 15 for
annual periods beginning on or after 1 January 2018.
► One participant has not yet decided on the date of adoption,
but is considering early adoption in 2017.
Participants are generally leaning towards use of the modified
retrospective transition method
► Six participants have decided to apply the modified
retrospective transition method.
► 11 participants have yet to decide on the transition method.
► Many of those that are undecided are currently thinking of
selecting the modified retrospective transition method.
► Some participants have indicated that one of the key elements
delaying the selection of a transition method is to better
understand the investors’ needs regarding comparative
information.
16
1
Annual period beginning
on or after 1 January,
2018
Early adoption Not yet decided but
considering early
adoption
Adoption date of IFRS 15
6
0
11
Modified retrospective Full retrospective Not decided yet
Transition method

CommentaryData
2. Governance
Discussion with the audit committee and external auditors
Implementation of IFRS 15 has not been widely discussed with
internal and external stakeholders
► Participants are in the early stages of discussion with both the
audit committee and external auditors. Most plan to discuss
their implementation with the audit committee and external
auditors by the end of the year.
EY expects that the discussion with the audit committee and
external auditors will play a key role in the implementation
► The audit committee will provide necessary oversight and
discuss complex accounting estimates and management
judgements in the implementation of the new standard. Their
inclusion early on in the project will provide clearer guidance
to management and assist management in focusing on areas
of concern.
► External auditors will be interested in understanding the
transition and implementation plan set up by management to
ensure compliance with the new accounting standard. Timely
feedback from external auditors will help management
determine the effort and resources required to implement the
accounting changes and meet the disclosure requirements.
4
1
5
2
5
Discussed with
external
auditors
Discussed with
audit committee
Discussed with
both
Not planning to
discuss in 2016
Planning to
discuss by the
end of 2016
Discussion of implementation
and impact of IFRS 15 with
the audit committee or
external auditors

CommentaryData
2. Governance
Implementation project setup
1
6
9
1 1
Finance Accounting
Policy
Both Finance
and Accounting
Policy
Other Not decided
yet
IFRS 15 implementation
project lead
Involvement of Accounting Policy personnel is important in
project implementation
► Accounting Policy personnel are generally performing contract
analyses and assessments, with significant inputs from
Finance.
► Finance personnel are leading the work on the disclosure
requirements and implementing changes to the reporting
processes and information technology (IT).
The accounting change project will require the input of multiple
stakeholders
► Accounting Policy and Finance are leading the implementation
effort, but will require inputs from Operations and Product
Control.
► Business Groups will need to provide details and explanatory
guidance on contracts to ensure that the analysis is based on
how the contracts are practically applied.
► IT and infrastructure teams will need to provide insights into
the level of recalibration of systems and data points required.
► Additional success factors in project implementation include
the integration of interactions with other functional units, such
as Operations, IT and affected business units.

CommentaryData
2. Governance
Implementation project setup (continued)
7
3
2
5
Dedicated accounting change
management programme
Part of a broader accounting change
management project with dedicated
project manager
Part of a broader accounting change
management project with no dedicated
project manager
Other
Structure of the IFRS 15
project
The structure of the implementation programme could indicate
the level of effort and resources directed towards IFRS 15:
► Four out of five participants that selected “other”, while noting
that there is no separate accounting change project, have
indicated that the project is being run within Finance or
Accounting Policy.
IFRS 15 will have a broad impact on existing governance
arrangements:
► Interactions between Finance, Accounting Policy, IT and
Operations will need to be managed.
► A structured governance framework will allow for a stronger
link between all stakeholders.

CommentaryData
2. Governance
Multiple locations
1
0
4
5
1
1
5
Exclusively centralised implementation
Exclusively decentralised
implementation
Centralised implementation with a few
exceptions depending on revenue
streams and systems
Centralised guidelines and
coordination; decentralised
implementation
Other
Not decided yet
Not applicable
Multiple locations –
Implementation approach
Centralised implementation efforts
► Project governance is generally aligned with the geographical
complexity of the organisation, with five participants applying a
significantly centralised or exclusively centralised approach.
► Five participants are expecting to implement a decentralised
approach due to their complex regional operations and rely on
established and mature Accounting Policy or Finance teams.
► Participants still expect to centrally provide and manage
guidelines covering:
► Strong governance
► Standardised assessment of products and business
units to ensure consistency of documentation and
quality
► Controls, processes and IT system implementation
► Coordination with other stakeholders (e.g. IT and
Operations, where applicable)

CommentaryData
3. Implementation
Current status of project
Scoping of revenue streams and high-level impact assessment:
► All participants have started and many have completed the
scoping of revenue streams, but three have not yet set up
governance.
► All participants but one have started the high-level impact
assessment and nine participants have completed it.
Setting up governance and scoping will provide the required
framework for implementation:
► Having clearly established governance will assist decision
making on key approach steps and assumptions.
► Comprehensive scoping of revenue steams will be critical for
an effective and efficient implementation and provide
disclosures consistent with ESMA’s guidance.
Participants have focused less on data, systems, operating
models and control frameworks:
► Most participants are still in the process of performing a
detailed assessment of revenues and plan to focus on data
and systems infrastructure requirements thereafter.
► Identifying additional data needed in order to comply with the
new disclosure requirements will be an area of focus for most
participants, even if they do not expect a significant impact on
their financial statements.
6
15
5
7
7
1
3
10
2
8
5
6
4
6
4
1
3
4
3
3
3
3
1
1
1
9
8
7
Reporting & disclosures
Implement IT changes
Policy decisions
Contract reviews
Detailed impact assessment
High level impact assessment
Scoping of revenue streams
Set up governance
Current status of IFRS 15
implementation project
Not Started
In process:
early stages
In process:
advanced
stages
Completed

CommentaryData
3. Implementation
Financial statement impact
► Although a majority of the participants do not expect a
significant impact overall, six participants have identified
business lines or products that may be significantly affected by
the new standard.
► Some of the participants noted that, even though there may be
no material impact for group reporting, subsidiaries could be
significantly affected.
► Business lines and products expected to be significantly
affected include:
► Wealth and asset management (performance fees)
► Trade execution/broker services (including trail
commissions)
► Participants are expending significant efforts to perform
detailed analyses before disclosing whether or not IFRS 15
will have a significant impact on the financial statements.
► Participants will have to assess if additional disclosure
requirements will increase the operational complexity for
financial reporting, considering IT, processes and systems
challenges.
► Participants not expecting a significant impact will still need to
analyse material revenues steams to demonstrate and
document their conclusions.
0
3
1
2
1
1
0
0
2
10
Credit Cards
Wealth and asset management
Investment banking
Trade execution/broker services
Cash management and…
Advisory services
Trade finance
Retail banking
Other
None (do not expect a…
Significant areas of impact
1
13
3
Yes No Not decided yet
Significant impact of IFRS 15
on financial statements

CommentaryData
3. Implementation
Processes, controls, and IT systems impact
► 10 participants indicated that they do not expect IFRS 15 to
have a significant effect on their processes, controls, and IT
systems.
► Seven participants have not determined if there will be a
significant effect and expect there will be some impact related
to specific business units or products.
► Participants noted potential impact to the following areas:
► Wealth and asset management
► Investment banking
► Trade execution and broker services
► Cash management and processing services
► Advisory services
► Participants who selected “other” areas of impact noted that
the new disclosure requirements will have an effect. However,
they have not completed a detailed assessment to determine
the impact.
► Participants will have to reassess their processes and controls
for data quality and data availability with respect to
disclosures, in line with ESMA’s expectations of providing
relevant and transparent financial information to users.
0
3
1
2
1
1
0
0
3
8
Credit Cards
Wealth and asset management
Investment banking
Trade execution/broker services
Cash management and payment…
Advisory services
Trade finance
Retail banking
Other
None (do not expect a significant…
Significant areas of impact
0
10
7
Yes No Not decided yet
Significant impact of IFRS 15
on processes, controls, and
IT systems

CommentaryData
4. Disclosures
1
2 2 2 2
8
2016 Q1 or Q2
2017
Q3 2017 2017 annual
report
2018 Not decided
yet
Timing of disclosure of
specific quantitative
information
► Eight participants are undecided on the timing of public
disclosure of quantitative information in their financial
statements.
► Participants are still in the early stages of analysing the level
of quantitative disclosure required based on the outcome of
their detailed impact assessment.
► One of the drivers of the timing of the disclosures is the
availability of resources, which may be concurrently busy with
the preparation of the 2016 annual report. The need to focus
on other accounting changes, such as IFRS 9 Financial
Instruments, is also a key factor.
► Participants that do not expect a significant impact from the
adoption of IFRS 15 will still have to provide disclosures based
on the requirements of the standard. Participants may also
need to consider local regulators’ expectations, such as the
guidance from ESMA on providing relevant and transparent
financial information to users.

CommentaryData
4. Disclosures (continued)
2
1
2
3
6
12
11
8
6
9
5
5
7
8
d. When the quantitative information is not
disclosed because it is unknown or not reasonably
estimable, additional qualitative information
enabling users to understand the magnitude of the
expected impact on the financial statements of the
issuer
ii. Per revenue stream
(segments/products/operations most impacted)
i. Total
c. Quantification of the possible impact of the
application of IFRS 15 (if known or estimable)
b. Explanation of the timeline for implementing
IFRS 15, including expected use of any of the
transition practical expedients (such as
modified/full retrospective application and the
practical expedient for completed contracts
a. Detailed description and explanation on how key
IFRS 15 concepts will be implemented along the
different revenue streams
ESMA good practice of disclosures -
when expecting a significant impact
for 2016 annual reporting
To disclose Not to disclose Not decided yet
► Participants are still in the early stages of analysing the level
of disclosures required in 2016, including establishing the
information they would expect to be useful to users.
► One of the drivers on the expected timing of disclosures is
linked to the resources that will be available, which may also
be involved in the current preparation of the 2016 annual
report, as well as other accounting change projects, such as
IFRS 9.
► While participants are aware of ESMA’s guidance on relevant
disclosures to be made, starting in the 2016 financial
statements, a key driver of such disclosures is whether
IFRS 15 is expected to have a significant impact. Generally,
participants are of the view that this accounting change would
not have a significant impact. Therefore, they do not expect to
make such disclosures in 2016, although most participants
have yet completed the impact assessment.
► Six participants are currently considering not to provide any
qualitative information or quantitative information. However, It
is expected that these participants will at least disclose that
they do not expect IFRS 15 to have a significant impact to their
financial statements.

CommentaryData
7
1
1
7
4
5
8
4
6
11
8
6
c. Provide a statement that the adoption of the
standard is not expected to have a significant impact
ii. You are able to provide significantly more specific
information in the 2017 interim financial statements
compared to the information provided previously
i. You expect a significant impact from IFRS 15 but
are unable to provide reliable information on it in the
2016 annual report and reliable quantitative
information on the impact becomes available before
publication of the 2017 interim financial statement
b. Provide quantitative information on the impact of
the transition to IFRS 15 on interim financial
statements, if:
a. Provide an update on information provided in the
2016 annual financial statements (if applicable and if
information provided in 2016)
ESMA good practice of disclosures:
during 2017 interim reporting
► Participants’ responses reflect the early stages of the
implementation of the standard, as indicated in the previous
section.
► Seven participants are expecting to provide, in their 2017
interim financial statements, an update of the information
provided in their 2016 financial statements. We would expect
that the other participants will re-evaluate the need to provide
an update based on the progress and outcome of their
implementation assessments.
► A majority of participants do not expect to provide any
additional quantitative information because they do not expect
IFRS 15 to have a significant impact (eight participants) or
have not established yet whether there will be an impact (eight
participants).
► Six participants do not expect to even state that IFRS 15 will
not have a significant impact. Entities will need to consider
whether such an approach is consistent with the requirements
of paragraph 30 of IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
► Although the impact may not be significant for many
participants, certain details related to the implementation (such
as transition options and significant judgements) would be
expected to be disclosed as participants reach decisions.

CommentaryData
5
2
5
4
3
2
8
12
10
c. Information provided in previous
financial statements is further
developed and elaborated taking into
account the actual implementation of
IFRS 15
b. Provide the quantitative impact of the
application of IFRS 15 and explain the
changes to the amounts reported under
IAS 11 and/or IAS 18, disaggregated
as appropriate
a. Provide a quantitative assessment of
the impact of IFRS 15 on their financial
statements as of 1 January 2018
ESMA good practice of disclosures:
during 2017 annual reporting
► Participants’ responses reflect the early stages of the
implementation of the standard, as indicated in the previous
section.
► As for the 2017 disclosures, participants generally are of the
view that this accounting change will not have a significant
impact and, therefore, do not expect a need to make such
disclosures in 2017, although most participants have yet to
complete their impact assessments.
► Participants that do not expect a material impact will still have
to disclose the information required by IAS 8. Participants may
also need to consider local regulators’ expectations, such as
the guidance from ESMA on providing relevant and
transparent financial information to users.
► Despite any accounting impact, participants are expected to
comply with quantitative and qualitative disclosure
requirements of IFRS 15 in the year of adoption and on an
ongoing basis.

EY survey contacts and EY regional contacts
for IFRS 15 for banking
Fabio Fabiani
ffabiani@uk.ey.com
Mobile: +44 7788 368 770
Muzi Ghanchi
mghanchi@uk.ey.com
Mobile: +44 2079 511 822
EY survey contacts
EY regional contacts
France
Sophie Ganter
+33 1 46 93 47 97
sophie.ganter@fr.ey.com
Belgium
Emmanuel Villaire
+32 474 845 067
emmanuel.villaire@be.ey.com
Germany
Jana Währisch
+49 160 939 23072
jana.waehrisch@de.ey.com
United Kingdom
Fabio Fabiani
+44 7788 368 770
ffabiani@uk.ey.com
Switzerland
Natalia Dembek-Slusarczynska
+41 58 286 4421
natalia.dembek-slusarczynska@ch.ey.com
Netherlands
Siobhan Tipping
+31 88 40 72039
siobhan.tipping@nl.ey.com
Spain
Randolf Niedermeyer
+34 618 479 168
randolf.niedermeyer@es.ey.com
Italy
Francesca Amatimaggio
+39 3387 857 277
francesca.amatimaggio@it.ey.com
Japan
Toyohiro Fukata
+81 3 3503 1100
fukata-tyhra@shinnihon.or.jp

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© 2017 EYGM Limited.
All Rights Reserved.
EYG no. 00218-173Gbl
ED None
This material has been prepared for general informational purposes only and is not
intended to be relied upon as accounting, tax or other professional advice. Please refer
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IFRS 15 Benchmarking survey for financial services

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