Question ID:
2013_158
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Supervisory reporting - FINREP (incl. FB&NPE)
Article:
99
Paragraph:
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (as amended)
Article/Paragraph:
Annex III, F14.00, c060-c080
Disclose name of institution / entity:
Yes
Name of institution / submitter:
The Danish Bankers Association
Country of incorporation / residence:
Denmark
Type of submitter:
Industry association
Subject Matter:
FINREP: Calculation of accumulated changes in fair values- first application
Question:

Is it possible to apply a starting date for calculation of accumulated changes in fair values?

Background on the question:

Some of the banks' financial instruments are acquired and initially recognized many years ago and cost prices are often unknown or difficult to determine.

Date of submission:
14/08/2013
Published as Final Q&A:
14/02/2014
EBA Answer:

Reporting institutions should in principle be able to determine the accumulated changes in fair value of the financial instruments which they measure at fair value by going back in time to their internal IT systems until the moment when they acquired the instrument. The difference between the acquisition cost and the current value of the instrument may provide a proxy for the cumulated changes in fair value. However, where there have been changes in the level of holdings in the instrument since initial acquisition, further work will be required in order to determine a reliable estimate.

If such information does not exist or is not possible to retrieve without incurring into significant costs, following the principles of IAS 8, the reporting institution shall carry out a reliable estimation of this amount. Retrospective application back to the date of initial acquisition is required where a reliable estimate for this is able to be made. If a reliable estimate of the value at initial recognition is not possible, reporting institutions should apply the requirements retrospectively from the earliest period practicable.

Status:
Final Q&A
Answer prepared by:
Answer prepared by the EBA.
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