EBA · 2018_3783 Final Q&A

Calculation of the sf factor as per Article 473a(7)(b) of Regulation (EU) No 575/2013 (CRR)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
473a, para. 7
Topic
Accounting and auditing
Submitted by
Competent authority
Submitted
2018-03-30
Answered
2018-08-03
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Please clarify whether "RAsa" which is used for the calculation of the “sf” factor, as per Article 473a(7)(b) of the CRR, should be gross or net of tax

Background

In the definitions of Article 473a(7)(b) of the CRR, although it is specified that the numerator of "ABsa" should be calculated in accordance with point (a) of the second subparagraph of paragraph 1 [i.e. reduced by the amount of “t”, which is the increase in CET1 due to tax deductibility of the amounts "A2sa" and "A4sa", no such information is provided for the denominator "RAsa".

Answer

The requirements for the calculation of amount RAsa under Article 473a(7)(b) of Regulation (EU) No 575/2013  (CRR) do not require the calculation to be performed net of tax effects (which is explicitly the case for ABsa. In particular, when adjustments for tax effects are required elsewhere in Article 473a of the CRR, this is explicitly mentioned in the CRR. Furthermore, calculating the amounts RAsa for the purposes of paragraph 7(b) gross of tax is in line with the calculation of specific credit adjustments.

Original source: European Banking Authority, Q&A ID 2018_3783

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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