We would like to clarify what constitutes a fair value for the purpopse of encumbered and non-encumbered assets which are link to morgage of immovable property. What value should be used for the reporting of the Asset encumbrance template : Market Value (MV) or Mortgage plus interest. In addition tot this, should this amount be restricted to cover the balance of the exposure at the reference date . For example an exposure with an immovable propererty MV of €1million and a mortgage plus interest €850k and a balance of account of €840k; What amount should we report as Fair Value in the Template ?
The assets referred to Immovable Property shall be reported on row 110 (‘of which: mortgage loans) of template F 32.01 (Assets of the reporting institution, AE-ASS) of Annex XVI of Regulation (EU) No 680/2014 (ITS on Supervisory Reporting) as indicated in the instructions.
The value that shall be reported is the carrying amount of the assets held by the reporting institution. Carrying amount means the amount reported in the asset side of the balance sheet.
The amounts mentioned in the question shall be provided in the template F 32.04 (Sources of encumbrance, AE-SOU) where both the value of assets (carrying amount) and the value of matching liabilities (shall be reported at their carrying amount also) are reported.