IFRS 9 Impairment with SAP. IFRS 9 Impairment Add-on for the SAP Plattform SAP ERP Banking (CML/CFM)

Transcription

1 IFRS 9 Impairment with SAP IFRS 9 Impairment Add-on for the SAP Plattform SAP ERP Banking (CML/CFM) ADWEKO, February 2017

2 Management Summary The new IFRS 9 requirements need to be implemented for special financers or insurance companies regarding the calculation and posting of the risk provision only to a limited extent. From the reduced scope of work the demand for a lean, custom-fit and cost-effective solution arises. The new IFRS 9 standard is mandatory for capital market oriented banks and insurance companies as of January 1, that do not use the deferral approach. Corresponding implementation projects already started in 2015, taking preliminary studies into account already much earlier. Such large-scale projects are highly complex, expensive and absorb a variety of internal resources. Jointly with one of our customers, we have developed a solution based on an existing SAP infrastructure, which integrates seamlessly into existing processes: Implementation within 12 weeks. IFRS 9 functionality preconfigured. Direct integration into SAP subsidiary and general ledger. No investment in hardware or additional resources necessary. With the ADWEKO impairment solution, we enable special financers or insurance companies to efficiently implement the relevant, reduced scope. SAP does not provide IFRS 9 functionality or content on the SAP FAM platform. Therefore, the question arises of the introduction of a thirdparty software or a self-development. The latter often goes hand in hand with many, small-scale manual process steps, which are often taken critically by the auditors. We have set ourselves the goal of applying our solution precisely here and offering companies such as yours a cost-effective, high-quality IFRS 9 impairment solution. The advantage resulting from this - whether for commercial code (HGB) or for simulations of a future IFRS 9 adaptation - are obvious. Contact us to get to know the solution and ADWEKO ADWEKO Consulting GmbH 2

3 The Complexity of IFRS 9 Impairment is Different for Each Company. Initial Position Challenge IFRS 9 requires impairment calculation for asset items IFRS 9 is obligatory for capital market oriented banks and insurance companies without a deferral approach from IFRS 9 impairment results must be recorded by the accounting department Standard solutions are often not accurate and provide much more functionality than required Maintaining a clear IT architecture as a result of IFRS 9 requirements Lean project implementation with a focus on the scope of work to be covered Our Solution Integrated add-on development on existing SAP platform (SAP CFM/CML) Programming of an accurately fitting solution (IFRS 9 Compliance) Robust solution according to established software quality and development standards ADWEKO as a Partner We combine expertise in the area of impairment and standard software development Supplier of established standard software in the SAP sector (Financial Services) Use of experts with long software development history 2017 ADWEKO Consulting GmbH 3

4 ADWEKO impairment solution The solution is easy to configure (customizing), has its own run cockpit and process control for the automation of the processes. In addition, a dedicated authorization control is also possible. The number of interfaces is minimal, since existing databases are accessed on the existing platform. Use of existing technical and functional infrastructure / systems No new investments are expected for hardware or middleware. Possibly negative effects on performance with current quantity structures are not expected. Calculations are programmed in accordance with IFRS 9 Definition of EAD profiles, Determining Fwd/Lifetime PD, Impairment level assignment, Time interval setup, Determining EL/ELL, Determining initial rating IFRS 9 Impairment Report IFRS 9 Calculation bases are derived directly from the source systems and made available. The number of new interfaces and the establishment of data redundancies is reduced to a minimum. Results are stored versioned and transferred to other systems as required. EL/ELL results, Impairment level assignment results, calculation details 2017 ADWEKO Consulting GmbH 4

5 Import of business data Import of the risk parameters POCI the initial ratings Lifetime PDs Rolling out cashflows Time interval setup impairment level Calculation of EL/ELL Storing of the result data Import of business data Import of the risk parameters the initial rating Lifetime PDs Rolling out cashflows Time interval setup impairment level Calculation of EL/ELL Storing of the result data Technical Calculation Steps and Extensibility The ADWEKO impairment solution includes all necessary basic functionalities to ensure processing in accordance with IFRS 9, in particular the determination of the impairment level and the calculation of the EL / ELL. Manual processing of the input and result data can also be provided. Subsequent extensions, which can result from changes in the product portfolio, for example, can be implemented quickly and cost-effectively with the flexible framework. The simple extensibility is demonstrated on the bottom of the slide using the POCI example (purchased or originated credit impaired). Current Calculation Steps Expandability Using the POCI Example 1 2 2a New calculation step Adapted calculation step 2017 ADWEKO Consulting GmbH 5

6 Credentials ADWEKO: Our Competencies ADWEKO combines business knowledge, technical expertise and methodological competence. We pursue a holistic approach from the conception through the development to the test of the solution. Business Knowledge Technical Expertise Methodological Competence We are experienced in the IFRS 9 field (especially impairment) We know the typical requirements, for example, configurations, data management, risk provision calculation and impairment level assignment, as well as reporting. We have gained experience with the implementation of numerous other project solutions. Customer-specific developments on different SAP systems Technical implementation to SAP Bank Analyzer in IFRS 9 and impairment environment Integration scenarios with different tools Own SAP add-ons: ADWEKO act, ADWEKO alp improving and optimizing project and BAU user experience Various project management methodologies, PMO, fixedprice projects for release upgrades Agile approach for customer projects (implementations) and on internal developments We know the standard software development of the manufacturer and customer side (release upgrade and extensions) 2017 ADWEKO Consulting GmbH 6

7 All Benefits at a Glance Why is an Add-on Development the Best Solution? Why is ADWEKO the Optimal Partner? All IFRS 9 requirements are covered High level of cost certainty through implementation as fixed-price offer Possibility of own support or maintenance provided by ADWEKO Simple and cost-effective expansion (also internally) for new functional requirements Leverage current SAP ecosystem and internal knowledge base to minimise cost, disruption and increase efficiency ADWEKO is an IFRS 9 implementation partner for numerous International and national customers (including DZ Bank & Mercedes-Benz Bank) ADWEKO specializes in the enhancement of SAP solutions Commissioning directly from SAP for customer-specific extensions (CDP) Direct commissioning from customers ADWEKO licensed products With more than 100 employees and a large ecosystem, ADWEKO has access to a large pool of relevant experts 2017 ADWEKO Consulting GmbH 7

8 Your Contact Persons Managing Director of ADWEKO Christian Kobler Sales Germany Cord Bötger Division Manager Insurances Steffen Egly ADWEKO Consulting GmbH Altrottstr Walldorf/Baden Deutschland ADWEKO Global Ltd. 13 Princeton Court Felsham Road London SW15 1AZ England ADWEKO Hungary Kft. 1016, Budapest Hegyalja út em. Buda Center Irodaház Ungarn ADWEKO America Inc. 801 Brickell Avenue 9th Floor Miami, Fl USA ADWEKO Canada Inc. First Canadian Place 100 King Street West, Suite 5600 Toronto, Ontario, M5X 1C9 Canada