The IIF and the IBFed ( "the Associations") commented on the Enhanced Disclosure Task Force (EDTF) draft report on the Impact of Expected Credit Losses on Bank Risk Disclosure. In the context of the new and forthcoming Expected Credit Loss (ECL) impairment standards of the IASB and the US FASB, the report aims to achieve greater consistency and comparability of disclosure across internationally active banks. High quality disclosure when introducing ECL-based provisioning will be particularly important as the accounting will include a greater degree of management judgement, and forward-looking information, and the requirements for the calculation of accounting ECL will differ from those pertaining to regulatory Expected Loss (EL) for capital purposes.

The EDTF draft report provides new guidance on (a) the applicability of its existing fundamental EDTF risk disclosure principles; (b) the application of the existing 32 recommendations; (c) where necessary, additional considerations to apply the recommendations in the context of an ECL framework, including both temporary considerations which will cease to apply following the transition to the ECL framework, and permanent considerations; and (d) further guidance on application of these additional considerations specifically to IFRS 9. Guidance on the US FASB's forthcoming standards is not provided at this stage. The Associations support the draft report, adding some specific comments and suggestions that have been marked directly into the proposed draft for EDTF consideration. Those areas include suggested wording to:

• enhance users' awareness on the degree of change implied by the new accounting standards within each banking organization;
• clarify the EDTF proposal on the use of sensitivity analysis;'
• clarify the definition of adjustments as part of the collective assessment of ECL; and'
• strike the right balance between the information need and the way to present it to ensure that enough flexibility is left for preparers faithfully to depict each bank's individual business model in accordance with accounting standards