On 16 February 2021, the PRA published a letter it had sent to chief financial officers (CFOs) requesting an update on progress towards the recommendations of the Taskforce on Disclosures about Expected Credit Losses (ECLs). The letter refers to the Taskforce’s first report ‘Recommendations on a comprehensive set of IFRS Expected Credit Loss disclosures’ which was published in November 2018. It also refers to the Taskforce’s second report ‘Recommendations on a comprehensive set of IFRS Expected Credit Loss disclosures’ (including some illustrative examples and other guidance material) which was published a year later.
In a PRA letter of January 2019, the regulator stated that it expected firms to be looking to adopt the Taskforce’s first report in full, as amended by the second report, consistent with the commitments made in the British Bankers’ Association Code for Financial Reporting Disclosure. In the letter now published the PRA is asking if firms could voluntarily provide an update on progress, in particular letting the regulator know:
- How far firms have progressed in adopting each of the Taskforce’s recommendations. The PRA would be grateful if firms could provide that assessment against each recommendation.
- Firms’ plans for adopting the recommendations they have not so far adopted in full.
The PRA asks if firms could respond within six weeks of firm finalising their 2020 (or 2020/21) year-end annual report.