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List of Q&A's

Article 473a(2) – Consideration of accounting provisions for FVOCI debt instruments

Should the ECL on debt instruments classified at fair value through OCI under IFRS9 be included within the calculation of the amount to be added back to CET1 as set in Article 473a.2 ( “static approach”)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3932
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as final Q&A: 05/10/2018

Interaction between Articles 473a and 127 of the CRR (risk weight factor for exposures in default under the standardised approach)

Do banks in order to calculate the thresholds of Article 127 of Regulation (EU) No 575/2013 (CRR) have to consider all IFRS 9 provisions (without applying any scaling factor) or the amount of IFRS 9 provisions reduced by applying the scaling factor as per Article 473a?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3931
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as final Q&A: 19/07/2019

IFRS 9, validation rules v6012_m, v6013_m and v6014_m

In template F18.00 rows 211 to 231 for columns 120 and 140 and in template F19.00 rows 211 to 231 for columns 100 and 130 need to be opened. Validation rules v6012_m, v6013_m and v6014_m need to be deactivated as long as these positions are greyed out. These VRs may not be applicable for reporters under nGAAP that measure debt instruments at strict LOCOM and recognize accumulated impairment for performing exposures. Furthermore debt instruments measured at strict LOCOM under Austrian nGAAP are recognized as impaired assets in case there are negative credit-risk induced value adjustments.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3930
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 19/03/2021

Goodwill included in the valuation of significant investments

1. For the purposes of Article 37(b) CRR, are the significant investments of the institution limited to the significant investments in financial sector entities (FSE) or should they include all significant investments (i.e. also significant investments in entities that are not financial sector entities)? 2. Should Article 37(b) CRR be applied only when the significant investments outside the prudential perimeter are valued for prudential purposes using the equity method or should it be applied also when the significant investments are valued for prudential purposes at historical cost? 3. Should the amount to be deducted pursuant to Article 37(b) CRR be limited to goodwill or should it include also the other intangible assets included in the valuation of the significant investments of the institution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3929
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Requirements in Commission Delegated Regulation (EU) 2016/1712

- Do the requirements in Commission Delegated Regulation (EU) 2016/1712 only apply to financial contracts resulting in a liability which could be subject to bail-in under resolution, rather than all assets and liabilities?- Are there any expectations on the format/method of submission for the information if/when requested (i.e. excel, CSV, other)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3928
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 15/11/2019

IFRS 9 Transitional arrangements - Calculation of the amount of CET add-back in accordance to Article 473a – paragraph 4

How should the amount referred to in Article 473a(4) be calculated:a) The difference between the Expected Credit Losses (ECL) at reporting date for loans that are not credit impaired and the ECL at implementation date for all the loans that are not credit impaired at the implementation date, or;b) The ECL at reporting date for loans that are not credit impaired minus the ECL at implementation date for those same loans?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3927
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as final Q&A: 25/05/2018

IFRS 9 Transitional arrangements – Reporting of impact on Standardised exposure value of transitional credit risk adjustments

According to Article 473a(7)(b) of CRR, is it possible to report the impact on Standardised exposure value of transitional credit risk adjustments in COREP at an overall level?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3926
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as final Q&A: 25/05/2018

IFRS 9 Transitional arrangements - Calculation of the amount available for CET1 add-back

When assets were measured at amortised cost in accordance with IAS 39 then classified as FVTPL under IFRS 9, should they be included in the calculation of the ‘day 1’ static amount to be added back to CET1 as set in Article 473a(2)(b)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3925
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as final Q&A: 25/05/2018

Classification of a commitment to make under certain conditions an indemnity payment for a customer

Does a commitment to make under certain conditions an indemnity payment on behalf of a customer constitute an “off-balance sheet item other than those mentioned in (Article 166) paragraphs 1 to 8” according to Article 166(10) CRR?If so, does it constitute a medium/ low risk item according to Article 166(10)(c) CRR, specifically as one of the “other items also carrying medium/low risk and as communicated to EBA” according to Annex I, No. 3(b)(ii) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2018_3918
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/05/2021

Treatment of off-balance sheet exposures measured at reporting date at fair value trough P&L in templates F 18.00 and F 19.00

How should we treat off-balance sheet exposures measured at reporting date at fair value trough P&L from the reporting templates F 18.00 and F 19.00 point of view? Shall we include them into templates or not?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3912
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 22/02/2019

Gross carrying amount for purchased credit-impaired assets in FINREP and COREP

How should we define gross carrying amount of purchased credit-impaired assets (POCI) for reporting into FINREP templates (i. e. F 18.00 and F 19.00)? Related to gross carrying amount in previous question, how should we in define original exposures for reporting into COREP and LE templates? How should we calculate coverage ratio by allowances or provisioning for credit losses, if the value of allowances for expected credit losses related to the POCI is positive? For example: In Q1 2018 bank A simultaneously with other forbearance measures in respected existing exposures to the debtor who is already in default, grants him a new loan in CU 100.000 (=so-called transaction price). There is evidence that the loan is already credit-impaired at initial recognition, based on that fact bank identified this exposure as an originated credit-impaired financial asset in stage 3 (=POCI).The fair value of the loan at the time of drawdown (i.e. at initial recognition) is only CU 55.000, mainly due to the significant credit risk value adjustment. Therefore, bank at initial recognition in accordance with paragraph B5.1.2A (b) of IFRS 9 recognises one-day profit or loss (P&L) in CU 45.000. Bank recognises also allowance for expected credit losses (ECL) in CU 1.000. In Q4 2018 bank find out that estimated allowance for ECL in CU 1.000 and negative fair value adjustment due to credit risk in CU 45.000, which was, taking in to account one-day P&L and calculation of credit-adjusted effective interest rate under paragraph 5.4.1 (a) of IFRS 9, too pessimistic. Therefore, bank reverses allowances from the previous period in CU 1.000. In addition, bank recognises positive amount of allowances for ECL in CU 2.000. The same situation could happened if Bank A modified financial assets, which in accordance with paragraph B5.5.25 of IFRS 9 would result in the derecognition of the existing financial asset and the subsequent recognition of the new modified financial asset. If there is evidence that the new modified financial asset is credit-impaired at initial recognition, it should be in accordance with paragraph B5.5.26 of IFRS 9 recognised as an originated credit-impaired financial asset (=POCI). Based on presented example, which option to calculate the gross carrying amount under paragraph 34 (b) of Part 2 Annex V of Regulation (EU) No 680/2014 for reporting purposes in the FINREP templates is correct: Option A: Fair value of financial asset defined at initial recognition in accordance with paragraphs 5.1.1, 5.1.1A and B5.1.2A of IFRS 9, as the starting point for using amortized cost method at subsequent measurement, because FINREP templates in general follow IFRS. According end of the Q1 and Q4 gross carrying amount is CU 55.000 (= transaction price in CU 100.000 minus recognised one day P&L in CU 45.000). Option B: Fair value of financial asset after adding back any negative fair value adjustment due to credit risk at initial recognition of financial asset, as starting point for credit losses calculation both for accounting and for capital adequacy purposes. According end of the Q1 and Q4 gross carrying amount is CU 100.000 (= transaction price). In this case negative fair value adjustment due to credit risk at initial recognition in CU 45.000 should increase amount of allowances for ECL. How should we, in respect of gross carrying amount in the example, define original exposures for the purpose of including in COREP and LE templates, in accordance with option A or option B?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3909
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Validation rules v5434_m to v5447_m in DPM 2.7.0

Are validation rules v5434_m to v5447_m correct?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3898
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as final Q&A: 12/04/2019

Validation rule v2818

Is there is an error in validation rule V2818 (check between AE and FINREP CON)? It caused a blocking error on the side of our institution. ERROR : v2818_m: sum({F 32.01, r070, (c010, c060)}) = {F 04.01, r080,c010} + {F 04.02.1, r070,c010} + {F 04.02.2, r080,c010} + {F 04.03.1, r070,c010} + {F 04.04.1, r030, c010} + {F 04.06, r080, c010} + {F 04.07, r080, c010} + {F 04.08, r080, c010} + {F 04.09, r030, c050} + {F 04.10, r080, c010} : [F 32.01: 22693164316; FINREP: 734022053; 596916000; 0; 11242205575; 10104104910] It checks debt securities issued by central banks and general governments. Apparently in the control some FINREP cells for central banks are missing. For example: {F 04.01, r070,c010} {F 04.03.1, r060,c010} {F 04.04.1, r020, c010} I see no reason why these fields are missing in the rule.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3897
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 11/01/2019

Reactivation of v0191_m as of v2.7.

Is the reactivation of v0191_m: {C 01.00, r370, c010} = {C 05.01, r170, c060} correct?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3887
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 22/02/2019

FINREP. Validation rule v5468_m

Is validaton rule v5468_m correct?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3884
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 09/11/2018

F 04.04.1, v5662_s.

ERROR : v5662_s: [F 04.04.1 (All rows, c050;060;070;080;090)] (F 04.04.1) <= 0 The validation rule is not correct. It shouldn’t include the row 150 ( of which : purchased credit-impaired financial assets) for which it is possible to have a positive value. It is possible to have a positive impairment for the purchase credit-impaired financial assets.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3876
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 19/03/2021

Inconsistencies in validation rules v1974_h, v5447_m, v5475_m and v5443_m

Whilst implementing DPM 2.7 we ran into some inconsistencies in the validation rules. The inconsistencies are caused by the validation rules as mentioned below. eba_v1974_h [F 17.01 (c010)] {r231} = +{r232} + {r233} Issue: in dpm 2.7 row 380 for equity instruments was added in report F17.00 and is part of row 231 but is not part of the right side of the equation. eba_v5447_m {F 18.00.a, r180, c010} = sum({F 04.09, r140, (c010, c020)}) + sum({F 04.10, r190, (c010, c020)}) - sum({F 04.10, r190, (c015, c025)}) + sum({F 01.01, (r030, r040), c010}) Issue: in report F18.00 row 180 only contains debt securities and loans and advances, whereas in the F4.x reports equity instruments are included as well (here, report F4.08 reports equity instruments). Rule eba_v5475_m has the same issue eba_v5443_m [F 18.00.a] {F 18.00.a, r100, c010} = sum({F 04.09, r100, (c010, c020)}) + sum({F 04.10, r150, (c010, c020)}) - sum({F 04.10, r150, (c015, c025)}) + {F 01.01, r030, c010} In template 18, the amount is for credit institutions, whereas the {F 01.01, r030, c010} refers to cash at central banks. If the reference was to row 40 (other demand deposits) instead of 30, the calculation would add up The question is: How to handle these inconsistencies?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3858
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 05/10/2018

Validation rules v5267_m up to v5279_m

This question is for validation rules v_5267_m up till v_5279_m.Validation rule v_5267_m requires the following condition is fulfilled:  sum({F 18.00.a, c010, (r010, r181)}) = sum({F 20.04, r080, c012, (sNNN)}). Is this validation rule correct?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2018_3852
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 19/03/2021