Available via Northern Trust’s single, global operating platform and fully integrated into client reporting packages, the IFRS 7 Valuation Toolkit consists of customizable level determination reports and various pricing related documents that provide clients with details related to the securities within their portfolios, according to a press release. An important element is level 3 roll-forward reporting, which shows activities and current year change in unrealized gains or losses for level 3 securities held at the end of the year, Northern Trust said.Level 3 securities have unobservable inputs or uncorroborated prices in the marketplace; therefore, additional footnote disclosures assist investors to better understand the risks associated with investing in these types of investments.
“Northern Trust’s toolkit is designed to provide a broad range of documentation, reporting, and recommendations from industry experts to help global custody clients meet IFRS 7 financial reporting disclosure requirements,” said Debra Clayton, client reporting product manager for Northern Trust, in the announcement. “Our toolkit is distinctive in that it automates the process. This delivers assurance of data integrity and enables the client to collate data for their IFRS reporting with greater ease, freeing them from the labor intensive and potentially complex tasks.”
The press release explained that in March 2009, amendments to IFRS 7, Financial Instruments: Disclosures, introduced a three-level pricing hierarchy to frame disclosures of fair values. Reporting entities are required to analyze their investment portfolios, classify securities into three levels, disclose movements of securities between levels, and provide reconciliation from beginning to ending balances (also known as “roll-forward reporting”) related to transactions for level 3 securities, the most difficult-to-price assets in the marketplace.
More information is at http://www.ntrs.com.