Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Own funds
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Accounting firm
Subject Matter:
Applicable provisions for determining deferred tax assets that rely on future profitability that existed before 1.1.2014

Are the provisions of Article 26(2) CRR regarding independently verified financial statements and permission of competent authorities applicable for determining deferred tax asset that rely on future profitability that existed before 1.1.2014?

Background on the question:

During the transition period for deferred tax assets that existed before 1.1.2014 and that exceed the thresholds of Article 470 CRR the applicable percentage to determine the amount to be deducted from CET1 is laid down in Article 478(2) CRR. In order to apply Article 478(2) CRR deferred taxes that existed before 1.1.2014 have to be determined.

From our perspective two alternatives are available to determine the basis for deferred taxes that existed before 1.1.2014:

1. following the provisions of Art. 26 para. 2 CRR the deferred taxes must be based on

a. the audited and formally confirmed financial statements; or

b. the independently verified/audited interim financial statements and permission of competent authorities has been granted.

2. deferred taxes are based on the booked values at the 31.12.2013 (the institution’s financial year deviates from the calendar year, so 31.12. is not the financial statement
date and audited financial statements are not available at this date).

Date of submission:
Published as Rejected Q&A
Rationale for rejection:

Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.

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Rejected question