The rule in plain words
Carrying amount cannot be negative.
EBA checks it for three rows: loans and advances, debt securities, and subordinated [for the issuer] financial assets. That makes three 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.
Loans and advances >= 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 04.05 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
Subordinated financial assets (F 04.05)
Rows
- 0010Loans and advances
- 0020Debt securities
- 0030Subordinated [for the issuer] financial assets
Column
- 0010Carrying amount
A worked example
The first of its checks, with simple numbers.
Loans and advances 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_04.05,r0010,c0010,} >= 0The next two:
{F_04.05,r0020,c0010,} >= 0{F_04.05,r0030,c0010,} >= 0Other rules on F 04.05
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.