According to the validation rule v11942_m it has been stated that {F 18.00.d, r0070, c0200} + {F 18.00.c, r0070, c0210} <= {F 18.00.a, r0070, c0060} + {F 18.00.b, r0070, c0150}. However, in our case net amount of total gross carrying amount of non-performing loans (NPL) + Accumulated Impairment is not higher than the amount of total collaterals and financial guarantees received for these loans. Since this validation ID’s severity is being stated as ‘warning’ can we proceed with the actual amounts and report with this situation?

In this validation rule, it is being blocked to submit any collateral amounts for non-perfoming loans which should not be the case as the collateral amounts can be higher than the net of gross NPL plus accumulated impairment.

In accordance with Regulation (EU) 2021/451, Annex V, Part 2, paragraph 239 which refers to paragraph 172, when talking about debt instruments at amortised cost, the sum of the amounts of the guarantee and/or collateral “shall be capped at the carrying amount […] after deduction of provisions of the related exposure”.

Therefore, the sum of r0070, c0200 and c0210 shall not exceed the sum of c0060 and c0150. The validation rule v11942_m is correct.