The rule in plain words
None of the values it checks in movements in allowances for credit losses and impairment of equity instruments can be negative.
EBA checks it for two columns: decreases due to amounts reversed for estimated loan losses during the period and decrease in allowance account due to write-offs. And for 24 rows, from specific allowances for credit risk (0330) to total (0530). That makes 48 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 in allowance account due to write-offs: Other 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 12.00 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 for credit losses and impairment of equity instruments under national GAAP (F 12.00)
Rows
- 0330Specific allowances for credit risk
- 0335Cash balances at central banks and other demand deposits
- 0340Debt securities
- 0350Central banks
- 0360General governments
- 0370Credit institutions
- 0380Other financial corporations
- 0390Non-financial corporations
- 0400Loans and advances
- 0410Central banks
- 0420General governments
- 0430Credit institutions
- 0440Other financial corporations
- 0450Non-financial corporations
- 0460Households
- 0470General allowances for credit risk
- 0475Cash balances at central banks and other demand deposits
- 0480Debt securities
- 0490Loans and advances
- 0500General allowances for banking risks
- 0505Cash balances at central banks and other demand deposits
- 0510Debt securities
- 0520Loans and advances
- 0530Total
Columns
- 0030Decreases due to amounts reversed for estimated loan losses during the period
- 0040Decrease in allowance account due to write-offs
A worked example
The first of its checks, with simple numbers.
Other financial corporations, decrease in allowance account due to write-offs 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_12.00,r0440,c0040,} >= 0The next five:
{F_12.00,r0505,c0040,} >= 0{F_12.00,r0530,c0030,} >= 0{F_12.00,r0350,c0030,} >= 0{F_12.00,r0380,c0030,} >= 0{F_12.00,r0500,c0030,} >= 0And 42 more, the same formula for the other cells it covers.
Other rules on F 12.00
- Each of the 72 values it checks in movements in allowances for credit losses and impairment of equity instruments cannot be more than zero (v3937_s)Warning
- Recoveries recorded directly to the statement of profit or loss cannot be negative (v3939_s)Warning
- Value adjustments recorded directly to the statement of profit or loss cannot be more than zero (v3936_s)Blocking
- Amounts written-off directly to the statement of profit or loss cannot be more than zero (v5687_s)Blocking
- Total must equal the sum of its four parts (v0895_m)Blocking
- Total must equal the sum of its three parts (v0894_m)Blocking
- Closing balance must equal the sum of its six parts (v0889_m)Blocking
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.