The rule in plain words
In column "Amount" (0010) of Capital adequacy - memorandum items (CA4) (C04.00.01.01): "Total deferred tax assets" (row 0010) must equal the sum of "Deferred tax assets that do not rely on future profitability" (row 0020), "Deferred tax assets that rely on future profitability and arise from temporary differences" (row 0040) and "Deferred tax assets that rely on future profitability and do not arise from temporary differences" (row 0030).
The headline gives only the template and the kind of check, because the rule is too long to say in a headline. The plain words above say all of it.
What to do if your return fails it
- 01Open the tables below and find the cells the rule reads.
- 02Add up the parts in your return and compare the result with the total.
- 03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
- 04The Bank of England allows a small rounding difference, worked out from the decimals each value is reported with.
- 05It runs only when your filing indicators mark C04.00.01 as reported.
- 06This is a warning. It does not stop the return on its own, but your supervisor may ask you to explain it.
The cells it reads
Capital adequacy - memorandum items (CA4) (C04.00.01.01)
Rows
- R0010Total deferred tax assets
- R0020Deferred tax assets that do not rely on future profitability
- R0030Deferred tax assets that rely on future profitability and do not arise from temporary differences
- R0040Deferred tax assets that rely on future profitability and arise from temporary differences
Column
- C0010Amount
Memorandum items for SDDTs (CA4 SDDT) (SC04.00.01.01)
Rows
- R0010Total deferred tax assets
- R0020Deferred tax assets that do not rely on future profitability
- R0030Deferred tax assets that rely on future profitability and do not arise from temporary differences
- R0040Deferred tax assets that rely on future profitability and arise from temporary differences
Column
- C0010Amount
A worked example
With simple numbers.
Total deferred tax assets must then be 2,450.
A file that reports 2,450 passes. One that reports 2,550 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
Which returns it applies to
Line4 Check runs it on the own funds (PRA001), capital+ actuals and forecasts (PRA112) and own funds for SDDTs (PRA116) returns on Bank of England banking taxonomy 4.1.1. The Bank of England applies it to own funds for SDDTs (PRA116), own funds (PRA001) and capital+ actuals and forecasts (PRA112) returns, as a warning.
The Bank’s own words and formula
The plain words above spell out the Bank’s formula, with each cell named from its templates. In the Bank of England’s list of validations, word for word:
v0128_h: [C04.00.01.01 (c0010)] {r0010} = +{r0020} + {r0040} + {r0030}
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
{t: C04.00.01.01, r: 0010, c: 0010} = {t: C04.00.01.01, r: 0020, c: 0010} + {t: C04.00.01.01, r: 0040, c: 0010} + {t: C04.00.01.01, r: 0030, c: 0010}The same code in the capital+ actuals and forecasts (PRA112) return: another check
The Bank of England uses v0128_h for a different check in the capital+ actuals and forecasts (PRA112) return. There it is a warning on memorandum Items (CA4) (CP04.00.04.01).
In column "Current reporting month" (column 0010) of Memorandum Items (CA4) (CP04.00.04.01): "Total deferred tax assets" (row 0010) must equal the sum of "Deferred tax assets that do not rely on future profitability" (row 0020), "Deferred tax assets that rely on future profitability and arise from temporary differences" (row 0040) and "Deferred tax assets that rely on future profitability and do not arise from temporary differences" (row 0030).
Memorandum Items (CA4) (CP04.00.04.01)
Rows
- R0010Total deferred tax assets
- R0020Deferred tax assets that do not rely on future profitability
- R0030Deferred tax assets that rely on future profitability and do not arise from temporary differences
- R0040Deferred tax assets that rely on future profitability and arise from temporary differences
Column
- C0010Current reporting month
The plain words above spell out the Bank’s formula, with each cell named from its templates. In the Bank of England’s list of validations, word for word:
[v0128_h];[scope({t: CP04.00.04.01, c:0010})];[{t: CP04.00.04.01, r: 0010} = {t: CP04.00.04.01, r: 0020} + {t: CP04.00.04.01, r: 0040} + {t: CP04.00.04.01, r: 0030}]
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
{t: CP04.00.04.01, r: 0010} = {t: CP04.00.04.01, r: 0020} + {t: CP04.00.04.01, r: 0040} + {t: CP04.00.04.01, r: 0030}Where it applies, in the Bank's words (its scope):
scope({t: CP04.00.04.01, c:0010, f: banking, fv: capital_plus})Other rules on Capital adequacy - memorandum items (CA4) (C04.00.01.01)
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0108_h)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0224_m)
- Capital adequacy - memorandum items (CA4): values must agree (v0225_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0226_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0227_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0228_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0229_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0230_m)Blocking
Every PRA banking rule on C04.00.01.01
Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.