The rule in plain words
None of the values it checks in movements in allowances and provisions for credit losses (I) can be negative.
EBA checks it for two columns: decrease due to derecognition repayments and disposals, and decrease in allowance account due to write-offs. And for 69 rows, from allowances for financial assets without increase in credit risk since initial recognition (Stage 1) (0010) to individually measured allowances (0750). That makes 138 checks. A failure names the one that failed.
How the Line4 Check report words itShowHide
The first of its checks, word for word as the report shows it when it fails. The others read the same, with their own column, row or sheet.
Decrease due to derecognition repayments and disposals: Non-financial corporations >= 0
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Look for a value with the wrong sign in these cells, such as an amount entered as a negative number.
- 03EBA compares the values exactly here: there is no rounding tolerance.
- 04It runs only when your filing indicators mark F 12.01 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
Movements in allowances and provisions for credit losses (I) (F 12.01.a)
Rows
- 0010Allowances for financial assets without increase in credit risk since initial recognition (Stage 1)
- 0015Cash balances at central banks and other demand deposits
- 0020Debt securities
- 0030Central banks
- 0040General governments
- 0050Credit institutions
- 0060Other financial corporations
- 0070Non-financial corporations
- 0080Loans and advances
- 0090Central banks
- 0100General governments
- 0110Credit institutions
- 0120Other financial corporations
- 0130Non-financial corporations
- 0140Households
- 0160of which: collectively measured allowances
- 0170of which: individually measured allowances
- 0180Allowances for debt instruments with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2)
- 0185Cash balances at central banks and other demand deposits
- 0190Debt securities
- 0200Central banks
- 0210General governments
- 0220Credit institutions
- 0230Other financial corporations
- 0240Non-financial corporations
- 0250Loans and advances
- 0260Central banks
- 0270General governments
- 0280Credit institutions
- 0290Other financial corporations
- 0300Non-financial corporations
- 0310Households
- 0330of which: collectively measured allowances
- 0340of which: individually measured allowances
- 0350of which: non-performing exposures
- 0360Allowances for credit-impaired debt instruments (Stage 3)
- 0365Cash balances at central banks and other demand deposits
- 0370Debt securities
- 0380Central banks
- 0390General governments
And 29 more.
Columns
- 0030Decrease due to derecognition repayments and disposals
- 0080Decrease in allowance account due to write-offs
A worked example
The first of its checks, with simple numbers.
Non-financial corporations, decrease due to derecognition repayments and disposals must then be at least 0.
A file that reports 0 passes. One that reports -100 fails, by 100.
The numbers are illustrative.
Show the rule as writtenShowHide
EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.
{F_12.01.a,r0420,c0030,} >= 0The next five:
{F_12.01.a,r0120,c0080,} >= 0{F_12.01.a,r0365,c0030,} >= 0{F_12.01.a,r0360,c0030,} >= 0{F_12.01.a,r0660,c0030,} >= 0{F_12.01.a,r0090,c0080,} >= 0And 132 more, the same formula for the other cells it covers.
Other rules on F 12.01.a
- Increases due to origination and acquisition cannot be more than zero (v23150_s)Warning
- Recoveries of previously written-off amounts recorded directly to the statement of profit or loss cannot be negative (v23152_s)Warning
- Each of the 207 values it checks in movements in allowances and provisions for credit losses (I) cannot be more than zero (v23149_s)Warning
- Allowances for purchased or originated credit-impaired financial assets must equal the sum of its two parts (row 0600, v23848_h)Warning
- Allowances for purchased or originated credit-impaired financial assets must equal the sum of its two parts (row 0600, v09606_m)Warning
- Closing balance must equal the sum of its seven parts (v09605_m)Warning
- Total allowance for debt instruments must equal the sum of its three parts (v09604_m)Warning
- Allowances for purchased or originated credit-impaired financial assets: debt securities must equal the sum of its five parts (v09602_m)Warning
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.