Question ID
2016_2574
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
24, 111
Paragraph
1
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
Article/Paragraph
2 (1)
Type of submitter
Credit institution
Subject matter
Assigning Specific Credit Risk Adjustments for a group of exposures to the exposures within the group
Question

Following question 2013_499, could you confirm that this implies that the collective provisions allocated to specific portfolios for accounting purposes (FINREP) will agree at aggregate level with the amounts booked in the financial statements but the allocation for RWA to single exposures will differ from the allocation for accounting purposes to single exposures and thus a single exposure will show a different collective provision for accounting purposes (FINREP) than that for RWA?

Background on the question
The reason behind this question is during audits (supervisory or otherwise) it is expected that the COREP provision of RWA should be in line with the accounting provision allocation. See also Q&A 2013_499 and Q&A 2013_201.
Submission date
Final publishing date
Final answer
Article 2(1) of the Regulation (EU) No. 183/2014 states that when a Specific Credit Risk Adjustment reflects losses related to the credit risk of a group of exposures, they should be assigned to all single exposures of the group proportionally to the risk-weighted exposure amounts (see also Q&A 2013_499). On the other hand, collective impairment allowances should be proportionally allocated among group assets for FINREP templates F 04.04 and F 07.00 (see also Q&A 2013_201). Consequently, the allocation of collective impairment allowances to single exposures for calculation of capital requirement for credit risk might differ from the allocation for FINREP purposes.
Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.
Note to Q&A

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.

Disclaimer

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