Single Rulebook Q&A

Question ID: 2018_4189
Legal act : Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 – CRR2
Topic : Supervisory reporting
Article: 99
Paragraph:
Subparagraph:
COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph : Annexes I and II
Type of submitter: Credit institution
Subject matter : Adjustments due to IFRS 9 transitional arrangements included in RWAs and interaction with validation rule v3689_s in template C5.01.
Question:

In template C5.01 validation rule v3689_s states that R010 C040 cannot be negative, should R010 C040 be excluded from this validation rule?

Background on the question:

Row 440, Column 040 asks for adjustments due to IFRS 9 transitional arrangements included in RWAs and is a negative figure. The correct logic for the template would be to also insert this figure into: a. R010 ‘TOTAL ADJUSTMENTS’ : C040 ‘Adjustments included in RWAs b. R100 ‘OTHER TRANSITIONAL ADJUSTMENTS’ : C040 ‘Adjustments included in RWAs’ The adjustments due to IFRS 9 transitional arrangements included in RWAs in Row 440 Column 040 relates to Article 7(a) and 7(b) of EU Regulation 2017/2395, adjustments to RWAs due to not taking into account the effects of credit loss provisions included in the transitional CET1 add back on deferred tax assets and specific credit risk adjustments on standardised exposures.

Date of submission: 08/08/2018
Published as Final Q&A: 12/07/2019
EBA answer:

Article 1.7 of Regulation (EU) 2017/2395 refers to the IFRS 9 transitional arrangements ‘by not taking into account the effects of the expected credit loss provision in CET1’. The adjustment of the RWA as reporting in column 040 of template C 05.01 of Annex I to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) is consequently necessarily a positive amount.

Hence, validation rule v3689_s is correct.

Status: Final Q&A
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