Adoption of US Generally Accepted Accounting Principles regarding employee benefits in financial statements of banking corporations
The Supervisor of Banks, David Zaken, today distributed for consultation with the banking corporations a draft of the implementation of US Generally Accepted Accounting Principles regarding employee benefits in the financial statements of banking corporations.
The draft is consistent with the Banking Supervision Department’s policy to adopt the array of financial reporting that applies to banks in the US in regard to material matters, and to maintain the quality of financial reporting at the banking corporations according to the highest standards. These standards include: accounting principles, guidance on measurement and disclosure, guidance regarding internal controls and an array of auditing standards.
In the view of the Banking Supervision Department, the effect of implementing these principles on the banking system will be similar to the effect of implementing international standards in this regard, including the measurement of liabilities for employee benefits by the yield to maturity of government bonds.
According to the draft, the date for implementation of the US Generally Accepted Accounting Principles in this regard is set for January 1, 2015. The financial statements of banking corporations that are published until that date will include disclosure of the expected quantitative effect of implementing these principles for the first time on the equity and liabilities of the banking corporations.
The effect on regulatory capital will be gradual, in accordance with the Supervisor’s capital adequacy directives (Basel III Guidelines) and will be spread out until 2018.