EBA · 2018_3953 Final Q&A

IFRS 9 Transitional arrangements – Reference date for the regulatory expected loss in Article 473a(5)(c)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
473a, para. 5
Topic
Accounting and auditing
Submitted by
Competent authority
Submitted
2018-06-01
Answered
2018-06-08
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Which date should apply to the regulatory expected loss for the application of Article 473a(5)(c)?

Background

Pursuant to Article 473a(5) (a) and (b) the reference date is explicitly mentioned not only for the calculation of accounting provisions but also for the regulatory EL. In paragraph 5, the reference to the 01/01/2018 or date of initial application in a narrow reading only relates to the calculation of the accounting provisions and not to the regulatory EL. Which date should apply to the regulatory EL: 31/12/2017, 01/01/2018 or reporting date?

Answer

In the absence of an explicit reference date   As mentioned in Article 473a(5)(c) of CRR for the calculation of the regulatory expected loss amounts (EL) in accordance with Article 158(5), (6) and (10) of that Regulation, the reference date for the calculation of the regulatory EL in Article 473(a)5(c) of CRR should be is 1 January 2020 or the the same as the reference date for the calculation of the IFRS 9 amounts to be reduced, that is 1 January 2018 or the date of initial application of IFRS 9 , whichever is later . As regards point (b) of the second subparagraph of paragraph 1 of Article 473a, when not specified, the reference date for the calculation of the regulatory EL should be the same as the reference date for the calculation of the IFRS 9 amounts to be reduced.

Original source: European Banking Authority, Q&A ID 2018_3953

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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