In this month’s roundup of developments in accounting and financial reporting, IFRS 9 adoption could wipe £2bn off Barclays' net value, FRC annual FRS 101 review defers changes to leases, IFRS 15 revenue recognition hits mobile operators
IFRS 9 Financial Instruments adoption could wipe £2bn off Barclays’ net value
Barclays has revealed that the estimated impact of adopting IFRS 9 Financial Instruments is a £2bn post tax decrease in shareholders’ equity while Lloyds Banking Group believes IFRS 9 will not have an impact on its capital position.
In its Q3 results, Barclays said: ‘Barclays’ estimated IFRS 9 impact, based on the portfolio as at 30 September 2017, is a decrease in shareholders’ equity of approximately £2bn post tax. This estimated reduction in shareholders’ equity equates to a decrease in tangible net asset value of 10 to 12 pence per share.’
IFRS 9 is effective for periods beginning on or after 1 January 2018. However, Barclays early adopted the credit provisions of the standard on 1 January 2017. The bank’s income reduced from £334m, including £292m of own credit, to £84m following the early adoption of the own credit provisions.
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