Question ID
2013_259
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Own funds
Article
478
Paragraph
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n.a.
Type of submitter
Accounting firm
Subject matter
Applicable provisions for determining deferred tax assets that rely on future profitability that existed before 1.1.2014
Question

Are the provisions of Article 26(2) CRR regarding independently verified financial statements and permission of competent authorities applicable for determining deferred tax asset that rely on future profitability that existed before 1.1.2014?

Background on the question

During the transition period for deferred tax assets that existed before 1.1.2014 and that exceed the thresholds of Article 470 CRR the applicable percentage to determine the amount to be deducted from CET1 is laid down in Article 478(2) CRR. In order to apply Article 478(2) CRR deferred taxes that existed before 1.1.2014 have to be determined.

From our perspective two alternatives are available to determine the basis for deferred taxes that existed before 1.1.2014:

1. following the provisions of Art. 26 para. 2 CRR the deferred taxes must be based on

a. the audited and formally confirmed financial statements; or

b. the independently verified/audited interim financial statements and permission of competent authorities has been granted.

2. deferred taxes are based on the booked values at the 31.12.2013 (the institution’s financial year deviates from the calendar year, so 31.12. is not the financial statement
date and audited financial statements are not available at this date).

Submission date
Rejected publishing date
Rationale for rejection

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Status
Rejected question