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Consistency in disclosure of expected credit losses

Consistency in disclosure of expected credit losses

Recommendations for large banks to enhance ECL disclosures to meet investors’ needs


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DECL is encouraging banks to adopt the recommendations as soon as possible

“These recommendations will not only be a step towards consistent, high-quality disclosures about expected credit losses in UK banks but also a step towards establishing best practice across the banking sector globally.”

Colin Martin
UK Head of KPMG’s Financial Sector Advisory Service 

A new UK Taskforce on Disclosures about Expected Credit Losses (DECL taskforce) has issued its first report, which includes recommendations for large UK banks on their disclosures about expected credit losses (ECL) in their annual reports.

The DECL taskforce comprises the seven largest UK banks, regulators, analysts, investors and auditors, and aims to promote high-quality disclosures about ECL that are consistent and comparable. 

ECL disclosures that go beyond IFRS requirements

The report sets out a number of disclosure principles and recommendations covering nine separate areas, including:

  • alignment between accounting for credit losses and credit risk management activities; 
  • forward-looking information;
  • uncertainty and sensitivities of ECL to judgements and estimates; and 
  • the impact of regulatory capital. 

These recommendations enhance or add to existing requirements set out in IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, and reflect the disclosures that analysts and investors would like to see in banks’ annual reports. 

Recommendations expected to have global influence

Although the recommendations are aimed at large UK banks, it is expected that they will become best practice for other banks in the UK and globally. The DECL taskforce encourages banks to apply its recommendations as soon as possible but acknowledges that it may take two to three years before they can be implemented fully. 

Proforma disclosures expected in a later report

A further report(s) is expected, which will outline how the recommended disclosures might be presented in the annual report. This report is expected to include proforma disclosures.

To find out more, read its Recommendations on a comprehensive set of IFRS 9 ECL disclosures  (PDF 496 KB) or speak to your usual KPMG contact. 

© 2020 KPMG, a group of Bermuda limited liability companies which are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.


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