Almonde introduces a practical IAS 39 impairment modelling solution

London April 19, 2005 – Almonde innovates again with an impairment modelling solution that is fully IAS 39 compliant and can implemented quickly. The module - developed in conjunction with Deloitte - leverages Almonde's expertise in credit risk (Basel II) and cash flow modelling/discounting (ALM) to implement IAS impairment modelling in a practical manner.

"Almonde is making it easy for banks to comply with IAS 39 impairment modelling requirements. We have developed an IAS39 compliant model that covers both the portfolio and individual exposure approaches and leverages synergies with Basel II information when available. The obvious benefits of such synergies were facilitated by the integrated structure of the Almonde risk management platform." added McMorran.

The Almonde Impairment Modelling module aims to handle the impairment impact involved in producing 3 major accounting measures:

• Provisions: Determine the provision based on the potential loss estimation due to impairment.

• Balance sheet: Properly recognizing the "carrying value" of a contract on the balance sheet (amortized cost or fair value net of impairment).

• P&L: Properly recognizing in P&L the income on impaired contracts.
The Almonde Impairment Modelling module can be implemented in phases. Phase I starts with data usually already available in banks’ systems. Phase II increases modelling sophistication with richer and more granular risk characteristics data. This progressive approach allows banks to be quickly operational and compliant while controlling their project risk and learning curve.

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