There are several validation rules that do not appear to be appropriate:

1. v2823_m
   sum({F 32.01, r120, (c010, c060)}) = sum({F 01.01, c010, (r020, r060, r092, r240-260, r290, r320-330, r360-370)})
   According to the instructions of F 32.01 and validation rule v2814_m, if the asset encumbrance reporting is based on IFRS, then the total assets of the reporting institution (sum({F 32.01,r010,(c010,c060)})) equals to the total assets reported in {F.01.01,r380,c010}.
   In order to meet this requirement, v2823_m should also contain row280 and row310 of F01.01. Now these items are missing from the formula.
2. Validation rules v2864_m and v2865_m are applicable for rows 020, 030, 050-060 of F 32.04, however row 060 is grey shadowed.
3. In our understanding v3309_i should be applicable only for IFRS banks because {F 36.01, r230, c180} equals to sum({F 32.01, r010,(c010, c060)}) which equals to Total assets of F 01.01 only if the report is based on IFRS. Now the formula doesn’t distinguish between IFRS and non-IFRS banks.

We have been analysing the validation rules of asset encumbrance templates published on EBA’s website. There seem to be some inconsistencies.

Question 1

Validation rule v2823_m aims to check that assets other than equity and debt instruments are equal in template F 32.01 (Asset Encumbrance) of Annex XVI to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) and in template F 01.01 (FINREP) of Annexes III and IV to the ITS on Supervisory Reporting.

The validation rule does not work because ‘Property, Plant and Equity’ and ‘Goodwill’ as reported in F 01.01 are not included in the formula (but they should be because they are neither debt nor equity instruments). The validation rule will be adapted accordingly.

Question 2

The scope of validation rules v2864_m and v2865_m has been amended. They will not apply anymore to row 060 of template F 32.04 of Annex XVI to the ITS on Supervisory Reporting with effect of end of June 2017.

Question 3

v3309_i verifies that the total assets reported in template F 36.01 of Annex XVI and template F 01.01 of Annexes III and IV to the ITS on Supervisory Reporting are equal. This validation rule holds in any case, considering the fact that the instructions on c180 of F 36.01 of Annex XVI (via the reference to row 010 of F 32.01) require the ‘Total assets of the reporting institution registered in its balance sheet’ to be reported.