- Question ID:
- Legal Act:
- Regulation (EU) No 575/2013 (CRR)
- Supervisory reporting - FINREP (incl. FB&NPE)
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
- Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
- Annex V
- Disclose name of institution / entity:
- Name of institution / submitter:
- Nationwide Building Society
- Country of incorporation / residence:
- United Kingdom
- Type of submitter:
- Credit institution
- Subject Matter:
- FINREP Taxonomy 2.5 Templates 04.04/18.00.b Validations
In taxonomy 2.5, are validations v3049_m to v3076_m the correct way round? That is, should the “<=” sign be “>=”?
- Background on the question:
Taxonomy 2.5 includes a number of reactivated validations. In particular, validations v3049_m to v3076_m require, for each counterparty, that the provisions on non-performing exposures (template 18.00.b column 150) are less than or equal to the total specific provision for that counterparty on template 04.04 (columns 030 and 040). Annex V Part 2.161 states “Incurred but not reported losses shall be reported in accumulated impairment on performing exposures”. Therefore, such impairments cannot be included in column 150 of template 18.00.b. As impairment provisions on both templates are presented as negative balances, the validations require the impairments on non-performing exposures to be “more negative” (i.e. more impaired) than the total specific provision on template 04.04. Given that the “incurred but not reported losses” cannot be included in non-performing, and given that some collectively assessed specific provisions are included within performing, it does not seem possible to pass these validations. It is possible that the sign on these validations should be reversed?
- Date of submission:
- Published as Final Q&A:
- Final Answer:
The accumulated impairment is defined in paragraph 161 of Annex V of Regulation (EU) No 680/2014 (ITS on Supervisory Reporting): “Accumulated impairment […] shall be reported in accordance with paragraph 46. Accumulated impairment means the reduction in the carrying amount of the exposure either directly or through the use of an allowance account. Accumulated impairment reported on non-performing exposures shall not include incurred but not reported losses”.
Anyway, in the current version of FINREP, the template F 18.00 includes impairments on other non-trading non-derivative financial assets which are not reported in template F 04.10 and as a consequence the validation rules do not take into account impairments referring to the financial instruments of template F 04.10. So, validation rules v3049_m to v3076_m need to have the sign “<=”.
- Final Q&A
- Answer prepared by:
- Answer prepared by the EBA.