The rule in plain words
None of the values it checks in geographical breakdown of main income statement items can be negative.
EBA checks it for two columns: domestic activities and non-domestic activities. And for twelve rows, from interest income (0010) to negative goodwill recognised in profit or loss (0220). That makes 24 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.
Domestic activities: Negative goodwill recognised in profit or loss >= 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 20.03 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
Geographical breakdown of main income statement items by location of the activities (F 20.03)
Rows
- 0010Interest income
- 0020(Interest expenses)
- 0030(Expenses on share capital repayable on demand)
- 0040Dividend income
- 0050Fee and commission income
- 0060(Fee and commission expenses)
- 0140Other operating income
- 0150(Other operating expenses)
- 0160(Administrative expenses)
- 0165(Cash contributions to resolution funds and deposit guarantee schemes)
- 0170(Depreciation)
- 0220Negative goodwill recognised in profit or loss
Columns
- 0010Domestic activities
- 0020Non-domestic activities
A worked example
The first of its checks, with simple numbers.
Negative goodwill recognised in profit or loss, domestic activities 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_20.03,r0220,c0010,} >= 0The next five:
{F_20.03,r0165,c0020,} >= 0{F_20.03,r0050,c0020,} >= 0{F_20.03,r0040,c0010,} >= 0{F_20.03,r0140,c0020,} >= 0{F_20.03,r0220,c0020,} >= 0And 18 more, the same formula for the other cells it covers.
Other rules on F 20.03
- Total operating income, net must equal a calculation over 18 rows (v1732_m)Warning
- Profit or loss before tax from continuing operations must equal a calculation over 30 rows (v0980_m)Warning
- Other operating income and expenses, expenses must equal the sum of its two parts (v23435_h)Warning
- Other operating income and expenses, income must equal the sum of its two parts (v23436_h)Warning
- Gains or losses on derecognition of non-financial assets other than held for sale, current period must equal the sum of its two parts (v903528_h)Warning
- Gains or losses on financial assets and liabilities designated at fair value through profit or loss, current period must equal the sum of its two parts (v903531_h)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.