International Accounting Standard 30

The International Accounting Standard 30 (IAS 30) is a standard of international accounting according to the International Financial Reporting Standards . It regulated the annual accounts of banks and similar financial institutions. As of January 1, 2007, it was completely replaced by IFRS 7 .

Basics

Already in the first paragraph of IAS 30 it is made clear that banks represent a significant and influential sector of economic activity worldwide. Investors today have a number of ways to invest their money. Essential criteria for decision-making are comparable, reliable and relevant information that should provide investors with information about their risks and their options. In addition, because of their close relationship with regulators and governments, banks play an important role when it comes to trust in the monetary system.

However, so that these users of the financial statements can assess the asset, financial and earnings position and thus make decisions, or supervisory authorities can take measures in the event of insufficient solvency coverage, certain regulations are required with regard to the annual financial statements. In order to do justice to these points, the European Commission has issued IAS 30 entitled “Information in the Financial Statements of Banks and Similar Financial Institutions” on the way to harmonizing accounting regulations.

IAS 30 was first adopted in 1990 as an industry-specific standard for the financial statements of banks and similar financial institutions and has been applicable since financial years that began on or after January 1, 1991.

The term “bank” is understood to mean all financial institutions whose

The main activities are in depositing and borrowing for the purposes of granting credit and investing money
that fall under statutory, bank-related or similar regulations

In contrast to the Banking Act (BWG), the standard dispenses with a detailed definition, but the second subline includes all companies that are a credit or financial institution according to Section 1 BWG.

backgrounds

In accordance with IAS 1 .8, the annual financial statements of every company subject to IAS accounting consist of a balance sheet , an income statement , a list of changes in equity , a cash flow statement and an appendix . This standard also applies to every bank. In addition, IAS 30 regulates the bank-specific disclosure requirements. The standard is to be viewed as a supplement to other standards that are also used by banks. In this respect, IAS 30 is to be understood as a “ lex specialis ” in the event of a conflict with other standards.

In addition, other standards apply to certain areas that IAS 30 does not cover. Since IAS 30 “only” regulates disclosure and disclosure requirements, further standards are indispensable for bank accounts (such as IAS 1 , IAS 7 , IAS 39 , etc.).

Profit and Loss Account

As already mentioned, IAS 1 is decisive for the profit and loss account . However, in contrast to the Austrian Banking Act, neither IAS 1 nor IAS 30 stipulate a specific classification scheme. Rather, the bank is basically free to decide which items are included in the income statement. Furthermore, it is not clear from IAS 30 which presentation of the income statement should be selected. Although there is no specific form of presentation of the profit and loss statement, and therefore a right to choose between graduated form and account form is to be assumed, a list in graduated form is customary internationally.

In order to guarantee a minimum of comparability, the disclosure of certain income and expense components is regulated in IAS 30.9 to IAS 30.17 . If a bank decides not to show certain components in the income statement, it is obliged to disclose these in the notes.

The standard also stipulates that income and expense items may not be netted with one another . The balancing of items is only allowed if they are permitted by a standard. These exceptions include items that result from exchange rate hedging transactions and the offsetting of financial assets and liabilities permitted in accordance with IAS 32.42.

In conjunction with IAS 1.8, IAS 30.9 generally regulates the obligation to prepare an income statement. Furthermore, paragraph 9 states that income and expenses are to be grouped according to type and the sum of the main types of income and main expenses must be stated.

For certain income or expense items that are not part of the main income or main expense types for the respective bank, IAS 30.10 explicitly allows a choice between disclosure in the income statement or in the notes. These are the following income and expense items:

Interest and similar income or expenses
Dividend income
Service fees
Commission income or expenses
Gains less losses from securities of current assets , held for trading and from the currency trading
Impairment losses from the lending business
General administrative expenses
Other operating income and expenses

From IAS 30.9 in conjunction with IAS 30.11 and IAS 30.12 it follows that items need not be disclosed in the notes if they actually concern a main type of income or expense. Rather, these are to be shown in the income statement.

Balance sheet

The annual financial statements of a bank do not essentially differ from those of another company in accordance with IAS 1.8. However, since a bank is a specific company, IAS 30 regulates the relevant accounting features.

In IAS 30.18 the obligation of a bank to prepare a balance sheet is formulated. A bank has to present a balance sheet that summarizes the assets and separately the debts according to their types and arranges them according to their relative, decreasing liquidity . The breakdown of a bank balance sheet is rather specific and is not based on fixed assets and current assets, as is the case with other companies . A further breakdown into current and fixed assets - as required by IAS 1.53 - is not necessary according to IAS 30.20, since most of the assets and liabilities of a bank can be realized or liquidated at short notice.

In addition to the requirements of other IAS, at least the following information must be given for the balance sheet or the notes of a bank in accordance with IAS 30.19:

assets

Cash reserve and balances at the central bank ,
Treasury bills and other rediscountable bills of exchange ,
Public and other securities ,
Claims and credits to credit institutions,
Other money market transactions,
Loans and advances to customers,
Fixed asset securities.

liabilities

Liabilities to other credit institutions,
Other liabilities from money market transactions,
Liabilities to other customers,
Certificates of deposit ,
Own acceptances and other securitized liabilities,
Other funds raised

If certain items in a bank's balance sheet are to be combined into one overall item, a breakdown must be shown separately in the notes. Of course, this has to be done so that no minimum information is lost.

attachment

The mandatory list of the notes is also based on IAS 1.8. The task of the appendix, as in the HGB or BWG, is to give the addressees of the financial statements a more faithful picture of the asset, financial and earnings situation. Since the IAS grants certain options between disclosure in the income statement or balance sheet, as well as in the notes, the scope of the information with regard to the notes is not fixed. This means that users of the financial statements must always consider the remaining financial statements instruments with the appendix. In this respect, the notes can be viewed as a particularly important annual financial statement instrument.

A bank has to observe all cross-sector disclosure requirements. The disclosures in the notes are based on IAS 1.103. Accordingly, the following information is required:

current information on the basis of the preparation of the financial statements and the special accounting and valuation methods ,
the information required by IFRS that is not shown in the balance sheet, the income statement, the statement of changes in equity and the cash flow statement,
Additional information that is not shown in the balance sheet, the income statement, the statement of changes in equity and the cash flow statement, but is relevant for understanding the same.

In addition, all disclosure requirements of other standards must of course be observed.

In addition to these and other cross-industry standards, banks are also obliged to meet industry-specific disclosure requirements, namely:

Maturity of assets and liabilities, (IAS 30.30–39)
Fiduciary business , (IAS 30.55)
Success uncertainties and other obligations including other off-balance sheet items, (IAS 30.26–29)
Concentrations of assets, liabilities and off-balance sheet items (IAS 30.40–42)
Losses from the lending business, (IAS 30.43–49), and
Business transactions with related companies and persons (IAS 30.56–58)

Innovations

On August 18, 2005, the International Accounting Standards Board (IASB) published the new IFRS 7 . This standard leads to a fundamental restructuring of the disclosure requirements for financial instruments. IAS 30 was therefore completely replaced from January 1, 2007.

literature

Edgar Löw: Accounting for banks according to IAS. 1st edition. 2003
Yvette Bellavite-Hövermann, Reinhard Prahl: Bank accounting according to IAS . Stuttgart 1997
IAS for banks , 2nd edition. PricewaterhouseCoopers
IAS 30
A. Jankovic: The IAS 30 . October 2005