IFRS 9: the new functionalities in SOFIA

As with any major regulatory innovation, APL Italiana has begun a series of activities in order to implement the guidelines of the IFRS 9 standard in relation to the management of the portfolios of financial instruments of Insurance Companies.

November 23, 2016 - Amongst the new functionalites that will be introduced with the release of SOFIA 61, we would like to highlight the SPPI (Solely Payment of Principal and Interest) Test check that, according to the security specification information registered, allows identifying the assets respecting the characteristics define by the Standard in order to register them in the following G/L destinations AC (Amortised Cost) and FV-OCI (Fair Value through Other Comprehensive Income and for which it will be required to calculate the amortised cost based on the IRR formula.

Other important news concern:
the stage allocation, that is the subdivision of the financial instruments into three levels of risk as defined by the common interpretation of the Standard ((Three-bucket approach)
the possibility to host models of risk customized for each Customer
the calculation of the impairment based on the ECL (Expected Credit Loss) evaluation calculated according to the Basel formula (standard solution) or any other custom formula
an automatic procedure in order to manage the cases of “Modification of contractual cash flows”
Enhancement of the information supplies necessary to the accounting and disclosure

For further information and details, please write to our specialist that can be contacted via the email address sofia.ifrs9@apl.it.