In what cell, if any, of CA1 shall institutions deduct half of the amount of the IRB shortfall of credit risk adjustments to expected losses in T2 capital?

According to Article 36.º (1) (d), institutions are required to deduct the referred amount to own funds (namely CET1). However, Article 472.º states that the residual amount of the items referred to in point (d) of Article 36 (1) shall be deducted half from Tier 1 items and half from Tier 2 items. Hence it is not clear in what T2 capital cell shall institutions deduct the residual amount (note that validation rules currently do not allow reporting of negative values in rows 910 and 978).

Article 472 (6) of Regulation (EU) 575/2013 (CRR) requires the deduction half from Tier 1 items and half from Tier 2 items of the residual amount of IRB shortfall of provisions to expected losses which is not deducted from CET1 according to the applicable percentage. This transitional provision is reflected mainly in template C 05.01 of Annex I of Regulation (EU) 680/2014 (ITS on Reporting). The residual amount should therefore be reported half in {C 05.01, r180, c020} and half in {C 05.01, r180, c030}. Aggregated with other transitional adjustments in C 05.01, the residual amounts will appear in {C 01.00, r730, c010} and {C 01.00, r960, c010}.

According to paragraph 13 a) of Annex II of ITS on Reporting, the position {C 01.00, r380, c010} includes the amount according to Art. 36 (1) d) CRR, i.e. the amount fully phased in. The adjustment according to Art. 469 (1) a) CRR (“applicable percentage”) is reported with a positive amount in {C 05.01, r180, c010}. Aggregated with other transitional adjustments in C 05.01, the adjustment due to the applicable percentage will appear in {C 01.00, r520, c010}.