EBA Q&A · 2023_6823
Transfers to PPE
Final Q&Afiled under Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions (repealed) (repealed)Submitted 07/06/2023 · published 06/10/2023
Question · verbatim
We have a collateral obtained some years back that was classified as Commercial Immovable property. In the current year the Group decided to transfer this property to PPE and use it for its own branches.
In table 25.1 the below rows exist. Where can we put the transfer (therefore outflow) mentioned above?
Outflow for which cash was collected
Outflow with replacement by financial instrument
Outflow due to negative changes in value
Background provided by the submitter · verbatim
As per Annex III in the outflows during the period we should:
a) the collateral obtained by taking possession shall include: (i) collateral sold for cash during the period; (ii) collateral sold with replacement by financial instruments during the period and (iii) negative changes in valuation of collateral during the period due to different reasons (such as negative changes in fair value, depreciation, impairment, write-off, changes of accounting policies). These types of outflows shall be reported separately in addition. Where collateral is derecognised in exchange for both cash and financial instruments, the relevant amounts shall be split and allocated to the two outflow types. ‘Collateral sold with replacement by financial instruments’ shall describe cases where the collateral is sold to a counterparty, and the acquisition by that counterparty is financed by the reporting institution.
b) The ‘debt balance reduction’ shall reflect the debt balance reduction of the exposure related to cases where the collateral was sold for cash or replaced by financial instruments during the period.
Answer · verbatim
Template F 25.01 does not have a specific line item where the reclassification of commercial real estate to property, plant and equipment for own use can be recorded. This transfer does not fit clearly in the line item 'Outflow for which cash was collected' nor in 'Outflow with replacement by financial instrument'. Consequently, it is proposed to use the negative changes in valuation of collateral during the period due to different reasons (such as negative changes in fair value, depreciation, impairment, write-off, changes of accounting policies).
Source: EBA Single Rulebook Q&A 2023_6823 · text as published, not rephrased · collected on 2026-10-08