Reporting of financial asset sales and write-offs in FINREP template F 02.00

How should financial asset (e.g. loan portfolio) sales and write-offs be reported in the template F 02.00 (Statement of profit or loss)?

Some banks report loan portfolio sales and write-offs in F 02.00 on a gross basis. Consequently when impairment is linked to the loan (measured at amortised cost), banks report reversal of impairment in row 460. Examples: 1.     Loan portfolio sale: o    Gross carrying amount: 100 o    Accumulated impairment: - 70 o    Net carrying amount: 30 o    Selling price: 35 Some banks report the transaction in the following way: o    row 220 (Gains or (-) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss): 35-100 = - 65 OR row 350 (Other operating expenses) +100-35= 65 (loss) o    row 460 (Impairment or (-) reversal of impairment on financial assets not measured at fair value through profit or loss): - 70 (impairment gain) 2.     Write-off o    Gross carrying amount: 100 o    Accumulated impairment: - 90 o    Amount written-off: 100 Some banks report write-offs in the following way: o    row 220 (Gains or (-) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss): - 100 (loss) o    Row 460 (Impairment or (-) reversal of impairment on financial assets not measured at fair value through profit or loss): - 90 (impairment gain) In our understanding IFRS doesn’t require the gross basis presentation (IFRS 9 3.2.12), thus sales and write-offs should be reported on a net basis in F 02.00. Therefore the decrease in the loss allowance due to the amounts written off or sold shouldn’t be reported in F 02.00 as a reversal of impairment.