How each the following expenses should be classified in FINREP template F 02, that is, should they be reported in row 350 (Other operating expenses), row 380 (Other administrative expenses), or under a different item? - contribution to the deposit guarantee scheme pursuant to national legislation implementing Article 10(3) of Directive 2014/49/EU of the European Parliament and of the Council - contribution to the Single Resolution Fund pursuant to Article 70(3) of Regulation (EU) No 806/2014 of the European Parliament and of the Council and Council Implementing Regulation (EU) 2015/81; or to a national resolution fund - a bank levy or a supervisory fee, such as the SSM Supervisory Fee (Regulation (EU) No 1163/2014 of the European Central Bank) or the “Dutch bank tax”.
For the reporting of the items mentioned above, we observed a wide array of practices across different banks and jurisdictions. Therefore, for the purpose of improving the consistency and harmonization of supervisory reporting, we ask the EBA to provide guidance expanding and clarifying the indications provided in Q&A 2014_1002 and Q&A 2015_2222. In fact, we note that: - The definition of what constitutes operating expenses or administrative expenses is not part of the IFRS standards. - There are no specific references in the FINREP templates and instructions for reporting under row 350 as opposed to 380, so the only guidelines for classification come from EBA Q&As and from common/national practices. EBA Q&A 2014_1002 gives some guidance but does not define a precise classification of the items mentioned in the original question: contributions to resolution funds, contributions to deposit protection schemes, bank levies and fees. - EBA Q&A 2015_2222 gives guidance that is valid in the context of the treatment of DGS contributions for LCR purposes – “Therefore the funding obligations resulting from membership, including contributions, in the form of cash or payment commitments to a DGS, should be regarded as operating expenses […]” - In practice, different jurisdictions adopt different approaches. To present some anecdotal evidence: Italian banks tend to report contributions to the deposit guarantee schemes and to the resolution fund together with other indirect taxes in “Other administrative expenses” – reported in row 380 of template F02. This is in accordance with an indication provided by Bank of Italy on the topic (https://www.bancaditalia.it/compiti/vigilanza/normativa/archivio-norme/c...). One Finnish group reports “Contributions to the resolution fund” and “Other administrative and supervisory fees” under “Other operating expenses” (see https://www.munifin.fi/sites/default/files/content_block/field_file/muni..., page 120) – reported in row 350 of template F02. One Dutch bank reports “Bank tax and resolution levy” in row 620 of template F02 (i.e. under “Tax Expenses or income related to profit or loss from continuing operations”).
For Finrep Reporting Framework versions earlier than v2.9, the expenses from contributions to Resolution funds and deposit guarantee schemes as well as supervisory fee shall be reported in accordance with their presentation in the public financial statements.
In Finrep version 2.9, cash contributions to Resolution funds and deposit guarantee schemes shall be reported in an ad-hoc row of the template F02 that is neither under other operating expenses nor under other administrative expenses. In addition, payment commitment shall be included in “provisions or (-) reversal of provisions” if the payment commitment gives rise to a liability in accordance with the applicable accounting standard. Supervisory fees or bank levies shall be reported within “other administrative expenses".