The rule in plain words
Carrying amount cannot be negative.
EBA checks it for nine rows, from capital (0010) to total equity and total liabilities (0310). That makes nine 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.
Total equity and total liabilities >= 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 01.03 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
Balance sheet statement: equity (F 01.03)
Rows
- 0010Capital
- 0020Paid up capital
- 0030Unpaid capital which has been called up
- 0040Share premium
- 0050Equity instruments issued other than capital
- 0060Equity component of compound financial instruments
- 0070Other equity instruments issued
- 0215Funds for general banking risks [if presented within equity]
- 0310Total equity and total liabilities
Column
- 0010Carrying amount
A worked example
The first of its checks, with simple numbers.
Total equity and total liabilities 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_01.03,r0310,c0010,} >= 0The next five:
{F_01.03,r0020,c0010,} >= 0{F_01.03,r0010,c0010,} >= 0{F_01.03,r0040,c0010,} >= 0{F_01.03,r0215,c0010,} >= 0{F_01.03,r0060,c0010,} >= 0And 3 more, the same formula for the other cells it covers.
Other rules on F 01.03
- Items that will not be reclassified to profit and loss must equal the sum of its eight parts (v5022_m)Warning
- Items that may be reclassified to profit and loss must equal the sum of its seven parts (v5023_m)Warning
- Carrying amount cannot be more than zero (v2060_s)Warning
- An upper-limit check across breakdown of interests in unconsolidated structured entities and balance sheet statement: equity (F 30.02, v1010_m)Warning
- Profit or loss attributable to owners of the parent must equal attributable to owners of the parent (v0786_m)Warning
- Total equity must equal the sum of its 14 parts (v0780_m)Warning
- Accumulated other comprehensive income must equal the sum of its two parts (v0779_m)Warning
- Fair value reserves must equal the sum of its four parts (v0059_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.