The rule in plain words
None of the values it checks in use of the fair value option can be negative.
EBA checks it for two columns: accounting mismatch and managed for credit risk. And for seven rows: financial assets designated at fair value through profit or loss, debt securities, loans and advances, financial liabilities designated at fair value through profit or loss, deposits, debt securities issued, and other financial liabilities. That makes 14 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.
Accounting mismatch: Financial liabilities designated at fair value through 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 41.02 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
Use of the fair value option (F 41.02)
Rows
- 0010Financial assets designated at fair value through profit or loss
- 0030Debt securities
- 0040Loans and advances
- 0050Financial liabilities designated at fair value through profit or loss
- 0060Deposits
- 0070Debt securities issued
- 0080Other financial liabilities
Columns
- 0010Accounting mismatch
- 0040Managed for credit risk
A worked example
The first of its checks, with simple numbers.
Financial liabilities designated at fair value through profit or loss, accounting mismatch 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_41.02,r0050,c0010,} >= 0The next five:
{F_41.02,r0080,c0010,} >= 0{F_41.02,r0030,c0040,} >= 0{F_41.02,r0010,c0040,} >= 0{F_41.02,r0060,c0010,} >= 0{F_41.02,r0080,c0040,} >= 0And 8 more, the same formula for the other cells it covers.
Other rules on F 41.02
- None of the eight values it checks in use of the fair value option can be negative (v3979_s)Warning
- Financial liabilities designated at fair value through profit or loss must equal the sum of its three parts (v1098_m)Warning
- Financial assets designated at fair value through profit or loss must equal the sum of its two parts (v1096_m)Warning
- Financial liabilities designated at fair value through profit or loss must equal the sum of its three parts (v23878_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.