Question ID
2013_423
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory reporting - COREP (incl. IP Losses)
Article
36
Paragraph
1b
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
Article/Paragraph
Row 350
Type of submitter
Credit institution
Subject matter
Gross amount of intangible assets
Question

Should the institution report in COREP other intangible assets in gross amount not net as today it's reported?

Background on the question

Today the amount of intangible assets that lowers Own funds is reported in net amount. This approach seems reasonable, while the difference between net and gross is amortization. Changing from net to gross amount lowers in material way the total own funds and from this point of view also CAD. This would be crucial change comparing to todays approach. Moreover CRR does not describe which amount (net or gross) of intangible assets should be taken to reporting. As long as it's described only in draft technical standard and does not have any background in legal regulation, we would like to get to know the justification of changing the approach.

Submission date
Final publishing date
Final answer

According to Article 4 (115) CRR 'intangible assets' has the same meaning as under the applicable accounting framework and includes goodwill. Intangible assets are deducted from own funds according to Article 36 (1) (b) CRR considering Article 37 (a) CRR.

Distinguishing between goodwill (reported in rows 300 to 330) and other intangible assets (reported in rows 340 to 360), template C 01.00 (CA1) reflects those requirements of CRR. The instructions of rows 340 to 360 refer to the legal references mentioned above. Moreover the instructions of row 350 clarify that the amount of intangible assets reported is the amount under the applicable accounting standard and reported in the balance sheet, minus goodwill. According to Article 37 (a) CRR the deducted amount of intangible assets shall be reduced by the amount of associated deferred tax liabilities. So the titles of rows 340 and 350 intend to distinct between intangible assets before consideration of Art. 37 (a) CRR, and intangible assets after consideration of Article 37 (a) CRR.

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.

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