EBA · 2025_7574 Rejected question

Calculation of dividend component at individual accounts of the institution

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
314, para. 2
Topic
Operational risk
Submitted by
Credit institution
Submitted
2025-09-04

Question

In the context of CRR article 314(2), should the dividend component (DC) at individual level include the dividends received from wholly owned subsidiaries?

Background

According to Article 314(2) of the CRR, the dividend component (DC) must include the institution's dividend income from investments in stocks and funds not consolidated in the financial statements of the institution, including dividend income from non-consolidated subsidiaries, associates and joint ventures.  Does the phrase "from investments in stocks and funds not consolidated in the financial statements of the institution, including dividend income from non-consolidated subsidiaries, associates and joint ventures" mean “not consolidated in the institution's financial statements at the individual level (in its separate financial statements)” or “not included in the scope of consolidation of the Group of which the institution is the parent company”? For example: Parent company A receives dividends of 100 euros from its wholly-owned subsidiary B. In the separate financial statements of the Parents company A, subsidiary B is accounted for at cost in accordance with IAS 27 (10), therefore, dividends are recognized in the income statement. At the consolidated level, subsidiary B is fully consolidated, therefore, dividends are eliminated as part of intercompany eliminations, because the subsidiary’s balance sheet and income statement are consolidated on a line-by-line basis. When determining the dividend component of the Parent company A at the individual level, should this component include the 100 euros in dividends (which are included in template Finrep F.02 in row 192 of the Parent company A at the individual level) received from its wholly-owned subsidiary B?
No answer published yet.

Original source: European Banking Authority, Q&A ID 2025_7574

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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