What it is
- Type
- Validation rule · within one template, general rule
- Release
- FINREP 4.4 validation · reported from 2022-12-31
- Source
- DPM 2.0 4.4 · operation 1853 · official
Regulation27
From the rows and columns of the cells involved.
Annex V Part 2 §72 F 12.01 c0080
‘Accumulated partial write-offs’ and ‘Accumulated total write-offs’ shall include, respectively, the accumulated partial and total amount as at the reference date of principal and accrued past due interest and fees of any debt instrument that has been de-recognised to date using either of the methods described in paragraph 74 because the institution has no reasonable expectations of recovering the contractual cash flows. Those amounts shall be reported until the total extinguishment of all the reporting institution’s rights by expiry of the statute-of-limitations period, forgiveness or other causes, or until recovery. Therefore, where the written-off amounts are not recovered, they shall be reported while they are subject to enforcement activities.
Annex V Part 2 §74 F 12.01 c0080
Write-offs shall constitute a derecognition event and relate to a financial asset in its entirety or to a portion of it, including where the modification of an asset leads the institution to give up its right of collecting cash flows on a portion or the entirety of this asset as further explained in paragraph 72. Write-offs shall include amounts caused by both reductions of the carrying amount of financial assets recognised directly in profit or loss and reductions in the amounts of the allowance accounts for credit losses taken against the carrying amount of financial assets.
Annex V Part 2 §156 F 12.01 r0565
Template 12.1 contains a reconciliation of the opening and closing balances of the allowance account for financial assets measured at amortised cost and at fair value through other comprehensive income broken down by impairment stages, by instrument (including cash balances at central banks and other demand deposits) and by counterparty. A separate reconciliation for purchased or originated credit-impaired financial assets shall be reported in the template.
Annex V Part 2 §157 F 12.01 r0530, r0540, r0560, r0570
The provisions for off-balance sheet exposures that are subject to the impairment requirements of IFRS 9 shall be reported by impairment stages and separately for purchased or originated credit-impaired exposures. Impairment for loan commitments shall be reported as provisions only where they are not considered together with the impairment of on-balance sheet assets in accordance with IFRS 9.7.B8E and paragraph 108 of this part. Movements in provisions for commitments and financial guarantees measured under IAS 37 and financial guarantees treated as insurance contracts under IFRS 4 shall not be reported in this template but in template 43. Changes in the fair value due to credit risk of commitments and financial guarantees measured at fair value through profit or loss in accordance with IFRS 9 shall not be reported in this template but in item ‘Gains or (-) losses on financial assets and liabilities designated at fair value through profit or loss, net’ in accordance with paragraph 50 of this Part.
Annex V Part 2 §159 F 12.01 c0020
‘Increases due to origination and acquisition’ shall include the amount of increases in expected losses accounted for on the initial recognition of financial assets originated or acquired. That increase of the allowance shall be reported at the first reporting reference date following the origination or acquisition of those financial assets. Increases or decreases in the expected losses on those financial assets after their initial recognition shall be reported in other columns. Originated or acquired assets shall include assets resulting from the drawdown of off-balance sheet commitments given.
Annex V Part 2 §160 F 12.01 c0030
‘Decreases due to derecognition’ shall include the amount of changes in allowances due to financial assets de-recognised totally in the reporting reference period for reasons other than write-offs, which include transfers to third parties or the expiry of the contractual rights due to full repayment, disposal of those financial assets or their transfer in another accounting portfolio. The change in allowance shall be recognised in this column at the first reporting reference date following the repayment, disposal or transfer. For off-balance sheet exposures, this item shall also include the decreases in the impairment due to the off-balance sheet item becoming an on-balance sheet asset.
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Annex V Part 2 §161 F 12.01 c0040
‘Changes due to change in credit risk (net)’ shall include the net amount of changes in expected losses at the end of the reporting reference period due to an increase or decrease in credit risk since initial recognition, irrespective of whether those changes led to a transfer of the financial asset to another stage. The impact on the allowance due to the increase or decrease of the amount of financial assets as a consequence of the interest income accrued and paid shall be reported in this column. This item shall also include the impact of the passing of time on the expected losses calculated in accordance with IFRS 9.5.4.1(a) and (b). The changes in estimates due to updates or review of risk parameters as well as changes in forward-looking economic data shall also be reported in this column. Changes in expected losses due to partial repayment of exposures via instalments shall be reported in this column with the exception of the last instalment, which shall be reported in the column ‘Decreases due to derecognition’.
Annex V Part 2 §162 F 12.01 c0040
All changes in expected credit losses related to revolving exposures shall be reported in ‘Changes due to change in credit risk (net)’, except for those changes related to write-offs and updates in the institution's methodology for estimation of credit losses. Revolving exposures shall be those for which customers' outstanding balances are permitted to fluctuate based on their decisions to borrow and repay up to a limit established by the institution.
Annex V Part 2 §163 F 12.01 c0070
‘Changes due to an update in the institution's methodology for estimation (net)’ shall include changes due to updates in the institution’s methodology for estimation of expected losses due to changes in the existing models or establishment of new models used to estimate impairment. Methodological updates shall also encompass the impact of the adoption of new standards. Changes in methodology that trigger an asset to change impairment stage shall be considered for a model change in its entirety. The changes in estimates due to updates or review of risk parameters as well as changes in forward-looking economic data shall not be reported in this column.
Annex V Part 2 §164 F 12.01 c0020, c0030, c0050, c0080
The reporting of the changes in the expected losses related to modified assets (IFRS 9.5.4.3 and Appendix A) shall depend on the feature of the modification in accordance with the following:
(a) where the modification results in the partial or total derecognition of an asset due to a write-off as defined in paragraph 74, the impact on expected losses due to this derecognition shall be reported in ‘Decrease in allowance account due to write-offs’, and any other impact from modification on expected credit losses in other appropriate columns;
(b) where the modification results in the complete derecognition of an asset for reasons other than a write-off as defined in paragraph 74 and its substitution by a new asset, the impact of modification on expected credit losses shall be reported in ‘Changes due to derecognition’ for the changes due to the asset derecognised, and in ‘Increases due to origination and acquisition’ for the changes due to the newly recognised modified asset. Derecognition for reasons other than write-offs shall include derecognition where the terms of the modified assets have been subject to substantial changes;
(c) where the modification does not result in derecognition of all or part of the modified asset, its impact on expected losses shall be reported in ‘Changes due to modifications without derecognition’.
Annex V Part 2 §165 F 12.01 c0080, c0120
Write-offs shall be reported in accordance with paragraphs 72 to 74 of this Part of this Annex and in accordance with the following:
(a) where the debt instrument is partially or totally derecognised because there is no reasonable expectation of recovery, the decrease in the loss allowance reported due to the amounts written off shall be reported in: ‘Decrease in allowance account due to write-offs’;
(b) ‘Amounts written-off directly to the statement of profit or loss’ shall be the amounts of financial assets written-off during the reporting reference period that exceed any allowance account of the respective financial assets at the derecognition date. They shall include all amounts written-off during the reporting reference period and not only those which are still subject to enforcement activity.
Annex V Part 2 §166 F 12.01 c0090
‘Other adjustments’ shall include any amount not reported in the previous columns, including the adjustments on expected losses due to foreign exchange differences where it is consistent with the reporting of the impact of foreign exchange in template 2.
Other acts
IFRS 9.2.1|(g)IFRS 9.2.3(c)IFRS 9.5.5IFRS 9.B2.5IFRS 9.5.5.3IFRS 9.5.5.1IFRS 7.B8EIFRS 7.35IIFRS 7.35B(b)IFRS 7.35JIFRS 9.5.5.12IFRS 9.B5.5.25IFRS 9.B5.5.27IFRS 9.5.4.4IFRS 7.35L
Controls8
8 other rules use at least one of these cells.
Other rules on the same cells
v23154_swarning10
with {tF_12.01.b, r*, default: null, interval: false}: {(c0080, c0120)} <= 0
v23155_swarning10
with {tF_12.01.b, r*, default: null, interval: false}: {(c0010, c0100)} >= 0
v23156_swarning10
with {tF_12.01.b, default: null, interval: false}: {(r0530, r0540, r0560, r0565, r0570), (c0020, c0110)} >= 0
v23153_swarning5
with {tF_12.01.b, c0030, default: null, interval: false}: {(r0530, r0540, r0560, r0565, r0570)} <= 0
v09612_mwarning1
{F 12.01.b, r0565, c0100} = sum({F 09.01.1, (r0010, r0090, r0170), c0065})
v6047_mwarning1
{F 12.01.b, r0530, c0100} = sum({F 09.01.1, (r0010, r0090, r0170), c0040})
v6048_mwarning1
{F 12.01.b, r0540, c0100} = sum({F 09.01.1, (r0010, r0090, r0170), c0050})
v6049_mwarning1
{F 12.01.b, r0560, c0100} = sum({F 09.01.1, (r0010, r0090, r0170), c0060})
Interpretation—
No EBA Q&A cites this rule.
Changes—
No change to this rule between the releases loaded.
Source: the DPM 2.0 database of the release shown above (expression, description, scope, cells; official). References inherited from Annex I (verbatim) and EBA instructions 4.2; links and counts are derived.