State Street Enhances PAM® Platform to Enable Client Compliance with IFRS 9
August 02 2016 - 11:50AM
Business Wire
Comprehensive Accounting and Portfolio Management Platform Helps
Address Changes in Financial Instrument Impairment and
Classification Accounting Standard
State Street Corporation (NYSE: STT) today announced
enhancements to PAM® for Investments, its comprehensive accounting
and management platform, to help clients comply with the
International Accounting Standard Board’s IFRS 9 (the Financial
Instruments mandate), which replaces IAS 39 and goes into effect
January 2018. This new standard, which impacts all entities with
financial instruments on the balance sheet regulated under IFRS,
fundamentally changes how financial assets are accounted for,
including how instruments are classified and measured, and how they
are impaired.
“While this regulatory change will provide high-quality
accounting standards, it can be daunting, given its potential to
impact all aspects of our clients’ business,” said Ivan Matviak,
head of State Street Global Exchange North America. “PAM is a
comprehensive, global accounting solution that enables clients to
run their books under both IAS 39 and IFRS 9 and therefore to see
results pre-and post-implementation, in parallel, one full year
before compliance is required. We’re pleased to offer it to our
clients to help them more easily navigate this transition.”
An IFRS 9 advisory committee comprised of the PAM platform’s
market leading client base and Product Management group, reviewed
system requirements and design, and collaborated in bi-weekly
demonstrations allowing for client input. This collaborative
approach helped incorporate real-time feedback into the design and
delivery of State Street’s new platform, and a superior solution
for accounting under IFRS 9.
“We welcomed the opportunity to participate in the Advisory
Committee for the development of IFRS 9 functionality on PAM, as we
believe client participation leads to an even better solution,”
said Matt McCoy, investment accounting manager, Transamerica Life
Insurance Company. “Changes in regulatory standards can have
significant impacts on business operations and the early
collaboration among the Advisory Committee members was critical in
developing the best possible platform.”
Additional updates to PAM include:
Classification and Measurement
- Supports classifications under IFRS 9
and the behaviors associated with those classifications
- Tracks whether a security has Solely
Payments of Principal and Interest (SPPI) and the Business Model of
the portfolio in which the security is held, and assigns a security
classification based on the information
- Provides an automated solution for
transferring securities to their new IFRS 9 classification based on
input from the user, and captures the accounting impact due to the
change in classification
Impairments
- Allows users to record an impairment
allowance against securities based on historical, current and
forecasted information and recognizes impairment allowances at the
time of purchase and at each reporting date to reflect changes in
the credit risk of the financial asset
- Tracks securities through three
possible stages of impairment and allows an impairment allowance to
be recorded separately for each lot within the position
- Recognizes securities change in market
valuation due to the accumulated impairment amount, the change in
fair value and movements in foreign exchange rates, and accurately
accounts for these changes in valuation according to IFRS 9
- Provides the reporting necessary to
support the extensive footnote disclosures required for impairment
securities
About State Street
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $27.78 trillion in assets
under custody and administration and $2.3 trillion* in assets under
management as of June 30, 2016, State Street operates in more than
100 geographic markets worldwide, including the US, Canada, Europe,
the Middle East and Asia. For more information, visit State
Street’s website at www.statestreet.com.
* Assets under management were $2.30 trillion as of June 30,
2016. AUM reflects approx. $40 billion (as of June 30, 2016) with
respect to which State Street Global Markets, LLC (SSGM) serves as
marketing agent; SSGM and State Street Global Advisors are
affiliated.
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State Street CorporationJulie Kane, 1
617-664-3001jekane@statestreet.com@StateStreet
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