Training Course: IFRS 9 and Climate Disclosure Essentials for Central Banks

IFRS 9 and climate disclosure for central banks means accounting for a central bank's bonds, deposits and loans under IFRS 9 while publishing the sustainability and climate statements that IFRS S1 and IFRS S2 require. This 5-day course is for central bank accountants, reserve managers and supervisors who need the essentials of both, and its final deliverable is a first-year implementation roadmap covering classification, impairment and the climate statement.

Introduction

Three standards frame the course. IFRS 9 Financial Instruments sets how assets are classified, measured and impaired through the expected credit loss (ECL) model. IFRS S1 sets general requirements for sustainability-related information, and IFRS S2 applies them to climate matters; both come from the International Sustainability Standards Board (ISSB). The level is practitioner essentials: this 5-day edition covers the decisions a central bank must take first and leaves extended modelling to longer study. Teaching uses short case exercises on a sample reserve portfolio and supervisory data.

Course Objectives

• Distinguish amortised cost from fair value and select the category a reserve asset belongs in from its business model and SPPI result
• Apply the three-stage ECL model to sovereign and bank exposures held in a reserve portfolio
• Interpret liquidity, market and credit notes so that asset quality and sensitivities are read correctly
• Distinguish physical from transition climate exposure and explain how each can reach reserve holdings and supervised institutions
• Apply IFRS S1 materiality judgement and IFRS S2 governance and strategy requirements to a first climate statement
• Justify an implementation sequence for IFRS 9, IFRS S1 and IFRS S2 that fits data, controls and assurance readiness

Target Audience

• Central bank accountants preparing annual statements, who must decide how each reserve and policy asset is classified and measured
• Reserve and investment managers, who must judge how impairment and climate exposure alter portfolio decisions
• Statistics and modelling officers, who must select the data and scenarios behind ECL estimates and climate scenario analysis
• Supervision and policy staff, who must determine how climate considerations enter the frameworks applied to regulated institutions
• Governance, audit and communications staff, who must assess whether published statements meet transparency and assurance expectations

Course Outline

Day 1: Central Bank Statements and IFRS 9 Classification

• Monetary Policy vs Reserve Management Holdings: Why Their Accounting Purposes Differ
• IASB vs ISSB: The Two Boards Behind Accounting and Sustainability Standards
• Recognition, Derecognition and Instrument Categories: Bonds, Deposits and Repo Positions
• Business Model and SPPI Assessment: The Two Tests That Decide Asset Classification
• Classification Exercise: Assigning a Sample Reserve Portfolio to IFRS 9 Categories

Day 2: Measurement, Valuation and Expected Credit Loss

• Amortised Cost vs Fair Value: Effective Interest Method Compared with Market-Based Valuation
• Initial and Subsequent Measurement: Carrying Amounts from Purchase Date Onwards
• Fair Value Hierarchy: Level 1, Level 2 and Level 3 Inputs for Valuation
• Three-Stage ECL Model: Stage Transfers, Forward-Looking Information and Macroeconomic Indicators
• Sovereign Exposure Case: Valuation and Impairment of Concentrated Government Bond Holdings

Day 3: Liquidity, Market and Credit Notes with IFRS S1 Materiality

• Liquidity vs Market Sensitivity Notes: Funding Gaps Compared with Rate and Price Shocks
• Credit Quality Notes: Asset Grades, Concentrations and Governance of Published Figures
• IFRS S1 Objectives and Scope: General Requirements for Sustainability-Related Information
• ISSB Role and Materiality Judgement: Accountability for What Gets Published
• Materiality Exercise: Identifying Sustainability Matters That Affect a Central Bank

Day 4: IFRS S2 Climate Statements and ESG Integration

• Physical vs Transition Exposure: Floods and Heat Compared with Policy and Technology Shifts
• IFRS S2 Core Content: Governance, Strategy and Oversight of Climate Matters
• Climate Scenario Analysis and Stress Testing: Testing Reserve Holdings Against Pathways
• ESG Factors in Models and Supervision: Adjusting Credit Views and Supervisory Frameworks
• Climate Statement Case: Drafting a Central Bank's First IFRS S2 Disclosure

Day 5: Integrated Implementation Roadmap Practice

• Ledger Data vs Non-Financial Data: Linking Accounting Figures with Climate and ESG Metrics
• Data Quality and Reporting Controls: Ownership, Reconciliation and Review Steps
• Limited vs Reasonable Assurance: Preparing Sustainability Information for Independent Review
• ISSB Adoption Trends and Common Hurdles: Applying Earlier Classification, ECL and Climate Work
• Implementation Roadmap: Completing the Sequenced IFRS 9, IFRS S1 and IFRS S2 Plan

Skills You Will Gain

• SPPI Testing
• Effective Interest Calculation
• Fair Value Hierarchy Mapping
• ECL Staging
• Liquidity and Sensitivity Analysis
• Sustainability Materiality Assessment
• Climate Scenario Analysis
• Assurance Readiness Review

Why Attend This Course

• From classifying reserve assets by habit to testing each one against its business model and SPPI criteria
• From loss estimates based on past defaults to staged ECL figures that draw on forward-looking indicators
• From treating climate as a policy topic only to tracing its physical and transition paths into the balance sheet
• From separate standards projects to one sequenced implementation roadmap for IFRS 9, IFRS S1 and IFRS S2

Conclusion

For a central bank, IFRS 9 decides how reserve and policy assets are carried and impaired, while IFRS S1 and IFRS S2 decide what it states publicly about sustainability and climate exposure. The course makes three distinctions clear: amortised cost against fair value, physical against transition exposure, and the general S1 requirements against the climate-specific S2 ones. It suits central bank accountants, reserve managers and supervisors who need the essentials of all three standards within one working week rather than an extended modelling course.

Course FAQs

What does IFRS 9 and climate disclosure mean for a central bank?

It means applying IFRS 9 to classify, measure and impair a central bank's holdings, and applying IFRS S1 and IFRS S2 to publish material sustainability and climate information on governance, strategy and exposure alongside the annual accounts.

What is the difference between physical and transition risk in IFRS S2 climate disclosure?

Physical risk comes from climate events such as floods, storms and heat that damage assets or disrupt activity. Transition risk comes from the move to a lower-carbon economy, through policy, technology and market changes that can alter bond values and issuer creditworthiness.

Which standards does the IFRS 9 and climate disclosure essentials course follow?

The course follows IFRS 9 Financial Instruments for accounting, with its expected credit loss model for impairment, and IFRS S1 and IFRS S2 from the ISSB for sustainability and climate statements.

Is the IFRS 9 and climate disclosure essentials course right for a reserve manager?

Yes. Reserve managers learn how classification, fair value and ECL affect the portfolio they run, and how physical and transition exposure is assessed and described, which supports their input to the bank's annual statements.

What do delegates produce in the IFRS 9 and climate disclosure essentials course?

Delegates produce a sequenced implementation roadmap for IFRS 9, IFRS S1 and IFRS S2, supported by a classified sample portfolio, an impairment case result and a draft climate statement built during the course.