If based on the applicable accounting framework (IFRS-EU) it is concluded that there is no contingent liability that should be disclosed for accounting purposes, is it then still possible that an off-balance sheet item exists, which should be recognised for exposure value calculation per Articles 111 CRR or 166 CRR?
Article 24(1) CRR states that the valuation of assets and off-balance sheet items shall be effected in accordance with the applicable accounting framework.
In case of a written commitment that the bank will provide additional capital to a third party, where however it can be assessed that the likelihood of having to put in this additional capital, i.e. having an outflow of economic resources, is (clearly) remote, IFRS 37.28 in such cases describes that no contingent liability is disclosed.
It is unclear whether it is correct to assume that in this case there is also no off-balance sheet item for which either Article 111 CRR or Article 166 CRR should be followed.
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