If incurred but not reported losses (IBNR losses) relate to a non-performing exposure, in which column should the collective allowances for IBNR losses be reported in template F 18.00 and F 19.00?

According to the instructions point 147 of Annex V “exposures with incurred but not reported losses shall not be considered as non-performing unless they meet the criteria to be considered as non-performing exposures.” In our understanding this means that exposures with IBNR losses can be classified as non-performing. However point 161 of Annex V states that: “Accumulated impairment reported on non-performing exposures shall not include incurred but not reported losses. Incurred but not reported losses shall be reported in accumulated impairment on performing exposures.”

The instructions can be interpreted in two ways:

1. Collective allowances for IBNR losses on non-performing exposures can’t be reported in template F 18.00, therefore F 18.00 doesn’t contain all allowances. Only IBNR losses on performing exposures shall be reported in the column “performing” (c140 of F 18.00). Some reporting institutions fill in template F 18.00, F 19.00 according to this interpretation.
2. Collective allowances for IBNR losses on non-performing exposures shall be reported in column “performing”, while the exposure amount stays in the “non-performing” column. However in this case data on gross carrying amounts of performing/non-performing exposures are not consistent with data on impairment on performing/non-performing exposures.

On 2016.03.10. the EBA reactivated several validation rules between F 18.00 and F 04.00 templates in the framework v2.5. Validation rules v3063_m - v3076_m require that all collective allowances for IBNR losses shall be reported in the column “performing”. Therefore the B) interpretation seems to be correct.

All collective allowances for IBNR losses shall be reported in the column accumulated impairment on performing exposures (c140 of template F 18.00 of Annexes III and IV of Regulation (EU) No 680/2014 – ITS on Supervisory Reporting) independently of the classification of the exposures as performing / non-performing.

If the credit institution considers an exposure with IBNR losses as a non-performing exposure, the exposure (gross carrying amount) shall be reported in the column “Non-performing” (c060 in F 18.00), but the relating collective allowances for IBNR losses shall be reported in accumulated impairment on performing exposures (c140 of F 18.00). The same rule applies for template F 19.00 of Annexes III and IV.