The rule in plain words
For common equity tier 1 capital: (-) deferred tax assets that rely on future profitability and do not arise from temporary differences net of associated tax liabilities, amount must equal deferred tax assets that rely on future profitability and do not arise from temporary differences, eligible amount without transitional provisions.
The headline gives only the kind of check and the template, because the rule is too long to say in a headline. The plain words above say all of it.
How the Line4 Check report words itShowHide
Word for word as the report shows it when the rule fails.
C_01.00: (-) Deferred tax assets that rely on future profitability and do not arise from temporary differences net of associated tax liabilities = C_05.01: Deferred tax assets that rely on future profitability and do not arise from temporary differences, Eligible amount without transitional provisions
What to do if your filing fails it
- 01Open the templates below and find the cells the rule reads.
- 02The two values must be the same. Find which of the two is right, and correct the other one.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark C 01.00 and C 05.01 as reported.
- 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.
The cells it reads
Capital adequacy - own funds definition (C 01.00)
Row
- 0370(-) Deferred tax assets that rely on future profitability and do not arise from temporary differences net of associated tax liabilities
Column
- 0010Amount
Capital adequacy - transitional provisions: Summary (C 05.01)
Row
- 0170Deferred tax assets that rely on future profitability and do not arise from temporary differences
Column
- 0060Eligible amount without transitional provisions
A worked example
The first of its checks, with simple numbers.
Deferred tax assets that rely on future profitability and do not arise from temporary differences, eligible amount without transitional provisions must then be 1,200.
A file that reports 1,200 passes. One that reports 1,300 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
Show the rule as writtenShowHide
EBA's formula. Cells are written as {template, row, column, sheet}.
{C_01.00,r0370,c0010,} = {C_05.01,r0170,c0060,}Other rules on C 01.00
- Own T2 instruments must equal the sum of its three parts (v0188_m)Warning
- Capital instruments and share premium eligible as T2 capital must equal the sum of its four parts (v0187_m)Warning
- Tier 2 capital must equal the sum of its 14 parts (v0186_m)Warning
- Excess of deduction from T2 items over T2 capital must equal minus excess of deduction from T2 items over T2 capital (deducted in AT1) (v0185_m)Blocking
- Own AT1 instruments must equal the sum of its three parts (v0184_m)Warning
- Capital instruments and share premium eligible as AT1 capital must equal the sum of its four parts (v0183_m)Warning
- Additional tier 1 capital must equal the sum of its twelve parts (v0182_m)Warning
- Excess of deduction from AT1 items over AT1 capital (see 1.2.10) must equal minus excess of deduction from AT1 items over AT1 capital (deducted in CET1) (v0181_m)Blocking
Every COREP own funds rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.