The rule in plain words
Carrying amount cannot be negative.
EBA checks it for 18 rows, from equity instruments (0010) to non-trading financial assets mandatorily at fair value through profit or loss (0180). That makes 18 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.
Carrying amount: Debt securities >= 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 04.02.1 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
Rows
- 0010Equity instruments
- 0020of which: credit institutions
- 0030of which: other financial corporations
- 0040of which: non-financial corporations
- 0050Debt securities
- 0060Central banks
- 0070General governments
- 0080Credit institutions
- 0090Other financial corporations
- 0100Non-financial corporations
- 0110Loans and advances
- 0120Central banks
- 0130General governments
- 0140Credit institutions
- 0150Other financial corporations
- 0160Non-financial corporations
- 0170Households
- 0180NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS
Column
- 0010Carrying amount
A worked example
The first of its checks, with simple numbers.
Debt securities, carrying amount 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_04.02.1,r0050,c0010,} >= 0The next five:
{F_04.02.1,r0010,c0010,} >= 0{F_04.02.1,r0150,c0010,} >= 0{F_04.02.1,r0130,c0010,} >= 0{F_04.02.1,r0070,c0010,} >= 0{F_04.02.1,r0180,c0010,} >= 0And 12 more, the same formula for the other cells it covers.
Other rules on F 04.02.1
- Accumulated negative changes in fair value due to credit risk on non-performing exposures cannot be more than zero (v5655_s)Blocking
- Loans and advances, accumulated negative changes in fair value due to credit risk on non-performing exposures must equal the sum of its two parts (v5536_m)Blocking
- Loans and advances, gross carrying amount must equal a calculation over twelve cells (v5532_m)Warning
- A total-and-parts check across information on performing and non-performing exposures, and breakdown of financial assets (F 18.00.b, F 04.02.2, row 0231, v5263_m)Blocking
- Households, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its two parts (v5262_m)Blocking
- Loans and advances: non-financial corporations, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its two parts (F 18.00.b, row 0226, v5261_m)Blocking
- Loans and advances: other financial corporations, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its two parts (v5260_m)Blocking
- Loans and advances: credit institutions, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its two parts (v5259_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.