FINREP: Calculation of accumulated changes in fair values- first application

Answer · verbatim

Reporting institutions should in principle be able to determine the accumulated changes in fair value of the financial instruments which they measure at fair value by going back in time to their internal IT systems until the moment when they acquired the instrument. The difference between the acquisition cost and the current value of the instrument may provide a proxy for the cumulated changes in fair value. However, where there have been changes in the level of holdings in the instrument since initial acquisition, further work will be required in order to determine a reliable estimate.

If such information does not exist or is not possible to retrieve without incurring into significant costs, following the principles of IAS 8, the reporting institution shall carry out a reliable estimation of this amount. Retrospective application back to the date of initial acquisition is required where a reliable estimate for this is able to be made. If a reliable estimate of the value at initial recognition is not possible, reporting institutions should apply the requirements retrospectively from the earliest period practicable.