According to Article 111 CRR, under the Standardised approach the exposure value of an asset item shall be its accounting value remaining after the application of specific credit risk adjustments in accordance with Article 110, additional value adjustments in accordance with Articles 34 and 105 110, amounts deducted in accordance with point (m) Article 36(1) and other own funds reductions related to the asset item.

On the other hand, under the IRB approach Article 166 CRR states that the exposure value of on-balance sheet exposures shall be the accounting value measured without taking into account any credit risk adjustments made.

As clarified in Q&A 1940, while interest income consists of positive remuneration on financial liabilities, the negative remuneration of financial assets (proceeding from a negative effective interest rate) constitutes an interest expense.

When there is an accrued positive interest, the accounting value would be increased. Symmetrically, in case negative interest is accrued, the accounting value would be decreased.

While Article 26(1)(c) CRR includes retained earnings in the Common Equity Tier 1 Items and Article 36(1)(a) CRR states that institutions shall deduct from CET1 the losses for the current financial year, these provision do not refer to the accrued negative interest of single items, but to the net profit or loss wherein changes to the interest income and expenses would already be reflected.