The rule in plain words
Total deferred tax assets must equal these three added up:
- Deferred tax assets that do not rely on future profitability
- Deferred tax assets that rely on future profitability and arise from temporary differences
- Deferred tax assets that rely on future profitability and do not arise from temporary differences
All the values are in the amount column (0010) of C 04.00.
How the Line4 Check report words itShowHide
Word for word as the report shows it when the rule fails.
Total deferred tax assets = Deferred tax assets that do not rely on future profitability + Deferred tax assets that rely on future profitability and arise from temporary differences + Deferred tax assets that rely on future profitability and do not arise from temporary differences
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Add up the parts in your file and compare the result with the total.
- 03If they differ, a part is missing, a value sits in the wrong row, or the total is out of date.
- 04EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 05It runs only when your filing indicators mark C 04.00 as reported.
- 06This 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 - Memorandum items (C 04.00)
Rows
- 0010Total deferred tax assets
- 0020Deferred tax assets that do not rely on future profitability
- 0030Deferred tax assets that rely on future profitability and do not arise from temporary differences
- 0040Deferred tax assets that rely on future profitability and arise from temporary differences
Column
- 0010Amount
A worked example
The first of its checks, with simple numbers.
Total deferred tax assets must then be 2,450.
A file that reports 2,450 passes. One that reports 2,550 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_04.00,r0010,c0010,} = {C_04.00,r0020,c0010,} + {C_04.00,r0040,c0010,} + {C_04.00,r0030,c0010,}Other rules on C 04.00
- Amount must be reported (e23673_e)Warning
- Amount cannot be negative (v23140_s)Warning
- Floor adjustment after application of transitional cap must be less than fully loaded floor adjustment (v22979_m)Warning
- Floor adjustment before application of transitional cap cannot be more than fully loaded floor adjustment (v22938_m)Warning
- Floor adjustment before application of transitional cap cannot be less than floor adjustment after application of transitional cap (v22937_m)Warning
- A check on capital adequacy: Memorandum items (v6295_m)Not run yet
- Combined buffer requirement must equal a sum of five terms (v6290_m)Blocking
- Total exposures, general credit risk adjustments must equal total gross provisions eligible for inclusion in T2 capital, amount (v6277_q)Warning
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.