Assume that we have an opening balance with a collective allowance of 25 (25 % x 100) for an unimpaired loan. The loan becomes impaired and therefore we make a specific allowance of 100 (100 % x 100) during the period. The collective allowance is re-calculated to 0 CU (25% x 0) at end of period. How shall it be reported: · Specific allowance on row 090/column 020 of 100? · Collective allowance on row 320/column ??? of -25? · Giving a net on row 530/column 060 of 75, or ?
Assume that we have an opening balance with a collective allowance of 25 (25 % x 100) for an unimpaired loan. The loan becomes impaired and therefore we make a specific allowance of 100 (100 % x 100) during the period. The collective allowance is re-calculated to 0 CU (25% x 0) at end of period. It is not clear how allowances should be reported in the templates, se question above.
According to the sign convention described in paragraph 9 of Annex V of the Regulation (EU) No 680/2014 13 ITS on supervisory reporting of institutionsITS, every data point (cell) has a "base item" to which the credit debit attribute is allocated. As all data points in template F 12.00 are described in the DPM as Assets, the opening and closing balance of the allowances (and increases of allowances) should be reported as negative and the decreases of allowances should be reported in positive.
Taking into account the above-mentioned criteria, the reporting of the example given shall be as follows:
*As of 1/8/2014 the content of this answer was modified to reflect the publication of the final ITS on supervisory reporting of institutions in the Official Journal of the European Union. As a result, the references to the ITS were updated and the disclaimer deleted. For reasons of transparency, revisions are highlighted in track changes.