FSRM leads workshop series

SGV’s Financial Services Risk Management (FSRM) group spearheaded a workshop series on Risk, Regulatory and Reporting Developments, which highlighted various oversight reforms that reinforce regulatory policies, intensify accounting and reporting requirements, and strengthen risk management practices for banks and government financial institutions. Key accounting, finance and treasury officers, credit and risk managers, compliance and audit executives from government financial institutions participated in the pilot session.

The workshop focused on the International Financial Reporting Standard (IFRS) 9, Financial Instruments, issued on 24 July 2014 and effective for annual periods beginning on or after 1 January 2018. IFRS 9 aims to align actual business practices with accounting processes and improve the usefulness of reporting financial instruments in decision-making. It introduces a new approach to the classification and measurement of financial assets, addresses the weakness of the “incurred loss” impairment model under International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, and replaces it with the “expected loss” impairment model. It enables entities to represent in their financial statements the effects of their risk management activities through improved hedge accounting guidelines.

FSRM Partner Ian Lauron welcomed the participants, who were mainly from the banking, government and public sectors. In addition to the above topics, the workshop also included a discussion on Government Business Entities (GBEs) and the relevant standards applicable to these entities, including the Philippine Public Sector Accounting Standards applicable to Non-GBEs. Capital Markets and Financial Accounting Advisory Services (FAAS) Senior Director Leomar Velez gave an overview of the International Accounting Standards Board’s IAS 39 replacement project and discussed the new classification and measurement of financial instruments under IFRS 9. Transaction Advisory Services Senior Director Smith Lim discussed IFRS 13, Fair Value Measurement, and gave an in-depth lecture on the fair value framework and estimating fair values for debt and equity securities. Capital Markets and FAAS Senior Director Enrico Rullan talked about the disclosure requirements of IFRS 13, underscoring the importance and purpose of the fair value hierarchy and the required fair value disclosures. FSRM Director Gabriel Manasan facilitated the discussion on the valuation of financial instruments, while FSRM Director Belvin Armenion discussed the expected credit loss (ECL) impairment model of IFRS 9 and presented the industry roadmap and implementation timeline for banks.

Members of the core team that organized the workshops comprised FSRM Senior Associates Russel Aaron Ailes and John Russel Torsiende, Associate Gabriel Mari Tioco, and Executive Assistant Irish Anne Galaroza. Supporting members included Senior Associate Saldy Cabarubias, and Associates Jasmin Urriza, Ma Eraissa Asetre, Joshua Tricia Diaz and Justine Elysia Zarate.