Commission Implementing Regulation (EU) No 680/2014Dangos y teitl llawn

[F1 15. BREAKDOWN OF SELECTED STATEMENT OF PROFIT OR LOSS ITEMS (16) U.K.

186. For selected items of the income statement further breakdowns of gains (or income) and losses (or expenses) shall be reported. U.K.

15.1. Interest income and expenses by instrument and counterparty sector (16.1) U.K.

187. Interest income shall be broken down in accordance with both of the following: U.K.

(a)

interest income on financial and other assets;

(b)

interest income on financial liabilities with negative effective interest rate.

188. Interest expenses shall be broken down in accordance with both of the following: U.K.

(a)

interest expenses on financial and other liabilities;

(b)

interest expenses on financial assets with negative effective interest rate.

189. Interest income on financial assets and on financial liabilities with a negative effective interest rate shall include interest income on derivatives held for trading, debt securities, and loans and advances, as well as on deposits, debt securities issued and other financial liabilities with a negative effective interest rate. U.K.

190. Interest expenses on financial liabilities and on financial assets with a negative effective interest rate shall include interest expenses on derivatives held for trading, deposits, debt securities issued and other financial liabilities, as well as on debt securities and loans and advances with a negative effective interest rate. U.K.

191. For the purpose of template 16.1, short positions shall be considered within other financial liabilities. All instruments in the various portfolios shall be taken into account except those included in the items ‘ Derivatives – Hedge accounting ’ not used to hedge interest rate risk. U.K.

192. ‘ Derivatives – Hedge accounting, interest rate risk ’ shall include the interest income and expenses on hedging instruments where the hedged items generate interest. U.K.

193. Where the clean price is used, interest on derivatives held for trading shall include the amounts related to those derivatives held for trading which qualify as ‘ economic hedges ’ that are included as interest income or expenses to correct the income and expense of the hedged financial instruments from an economic but not accounting point of view. In such case, interest income on economic hedge derivatives shall be reported separately within interest income from trading derivatives. Time-apportioned fees or balancing payments in relation to credit derivatives measured at fair value and used to manage the credit risk of part or all of a financial instrument that is designated at fair value at that occasion shall also be reported within interest on derivatives held for trading. U.K.

194. Under IFRS, ‘ Of which: interest-income on impaired financial assets ’ means interest income on credit-impaired financial assets, including purchased or originated credit-impaired financial assets. Under national GAAP under BAD, it shall include interest income on assets impaired with a specific impairment allowance for credit risk. U.K.

194i. ‘ Of which: credit for consumption ’ and ‘ of which: lending for house purchase ’ shall reflect the income and expenses on loans and advances as described in paragraph 88of this Part. U.K.

194ii. ‘ Of which: interest from leases ’ shall reflect the lessor’s interest income on the lease receivable (finance leases) and the lessee’s interest expenses on the lease liability respectively. U.K.

15.2. Gains or losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss by instrument (16.2) U.K.

195. Gains and losses on derecognition of financial assets and financial liabilities not measured at fair value through profit or loss shall be broken down by type of financial instrument and by accounting portfolio. For each item, the net realised gain or loss stemming from the derecognised transaction shall be reported. The net amount represents the difference between realised gains and realised losses. U.K.

196. Template 16.2 shall apply under IFRS to financial assets and liabilities at amortised cost, and debt instruments measured at fair value through other comprehensive income. Under national GAAP based on BAD, template 16.2 shall apply to financial assets measured at cost-based method, at fair value through equity, and in accordance with measurement methods such as the lower of cost or market. Gains and losses of financial instruments classified as trading under the relevant national GAAP based on BAD shall not be reported in this template regardless of the valuation rules applicable for those instruments. U.K.

15.3. Gains or losses on financial assets and liabilities held for trading and trading financial assets and trading financial liabilities by instrument (16.3) U.K.

197. Gains and losses on financial assets and liabilities held for trading shall be broken down by type of instrument; each item of the breakdown shall be the net realised and unrealised amount (gains minus losses) of the financial instrument. U.K.

198. Gains and losses from foreign currency trading on the spot market, excluding exchange of foreign notes and coins, shall be included as trading gains and losses. Gains and losses from precious metal trading or derecognition and re-measurement shall not be included in trading gains and losses but in ‘ Other operating income ’ or ‘ Other operating expense ’ in accordance with paragraph 316 of this Part. U.K.

199. The item ‘ Of which: economic hedges with use of the fair value option ’ shall include only gains and losses on credit derivatives measured at fair value through profit or loss and used to manage the credit risk of all or part of a financial instrument that is designated at fair value through profit or loss at that occasion in accordance with IFRS 9.6.7. Gains or losses due to the reclassification of financial assets out of the amortised cost accounting portfolio and into the fair value through profit or loss accounting portfolio or into the held for trading portfolio (IFRS 9.5.6.2) shall be reported in ‘ Of which: gains and losses due to the reclassification of assets at amortised cost ’ . U.K.

15.4. Gains or losses on financial assets and liabilities held for trading and trading financial assets and trading financial liabilities by risk (16.4) U.K.

200. Gains and losses on financial assets and financial liabilities held for trading shall also be broken down by type of risk. Each item of the breakdown shall be the net realised and unrealised amount (gains minus losses) of the underlying risk (interest rate, equity, foreign exchange, credit, commodity and other) associated with the exposure, including related derivatives. Gains and losses from exchange differences shall be included in the item in which the rest of gains and losses arising from the converted instrument are included. Gains and losses on financial assets and financial liabilities other than derivatives shall be included in the risk categories as follows: U.K.

(a)

interest rate: including trading of loans and advances, deposits and debt securities (held or issued);

(b)

equity: including trading of shares, quotas of UCITS and other equity instruments;

(c)

foreign exchange trading: including exclusively trading on foreign exchanges;

(d)

credit risk: including trading of credit link notes;

(e)

commodities: this item shall include only derivatives because gains and losses on commodities held with trading intent shall be reported under ‘ Other operating income ’ or ‘ Other operating expense ’ in accordance with paragraph 316of this Part;

(f)

other: including trading of financial instruments, which cannot be classified in other breakdowns.

15.5. Gains or losses on non-trading financial assets mandatorily at fair value through profit or loss by instrument (16.4.1) U.K.

201. Gains and losses on non-trading financial assets mandatorily at fair value through profit or loss shall be broken down by type of instrument. Each item of the breakdown shall be the net realised and unrealised amount (gains minus losses) of the financial instrument. U.K.

202. Gains or losses due to the reclassification of financial assets out of the amortised cost accounting portfolio and into the non-trading financial assets mandatorily at fair value through profit or loss accounting portfolio (IFRS 9.5.6.2) shall be reported in ‘ Of which: gains and losses due to the reclassification of assets at amortised cost ’ . U.K.

15.6. Gains or losses on financial assets and liabilities designated at fair value to profit or loss by instrument (16.5) U.K.

203. Gains and losses on financial assets and liabilities designated at fair value through profit or loss shall be broken down by type of instrument. Institutions shall report the net realised and unrealised gains or losses and the amount of change in fair value of financial liabilities in the period due to changes in the credit risk (own credit risk of the borrower or issuer) where own credit risk is not reported within other comprehensive income. U.K.

204. Where a credit derivative measured at fair value is used to manage the credit risk of all or part of a financial instrument that is designated at fair value through profit or loss at that occasion, the gains or losses of the financial instrument upon that designation shall be reported in ‘ Of which: gains or (-) losses upon designation of financial assets and liabilities designated at fair value through profit or loss for hedging purposes, net ’ . Subsequent fair value gains or losses on those financial instruments shall be reported in ‘ Of which: gains or (-) losses after the designation of financial assets and liabilities designated at fair value through profit or loss for hedging purposes, net ’ . U.K.

15.7. Gains or losses from hedge accounting (16.6) U.K.

205. All gains and losses from hedge accounting, except interest income or expense where the clean price is used, shall be broken down by type of hedge accounting: fair value hedge, cash flow hedge and hedge of net investments in foreign operations. Gains and losses related to fair value hedge shall be broken down between the hedging instrument and the hedged item. Gains and losses on hedging instruments shall not include gains and losses related to elements of the hedging instruments that are not designated as hedging instruments in accordance with IFRS 9.6.2.4. Those hedging instruments that are not designated shall be reported in accordance with paragraph 60of this Part. Gains and losses from hedge accounting shall also include gains and losses on hedges of a group of items with offsetting risk positions (hedges of a net position). U.K.

206. ‘ Fair value changes of the hedged item attributable to the hedged risk ’ shall include gains and losses on hedged items where the items are debt instruments measured at fair value through other comprehensive income in accordance with IFRS 9.4.1.2 A (IFRS 9.6.5.8). U.K.

207. Under national GAAP based on BAD, the breakdown by type of hedges as provided for in this template shall be reported to the extent the breakdown is compatible with the applicable accounting requirements. U.K.

15.8. Impairment on non-financial assets (16.7) U.K.

208. ‘ Additions ’ shall be reported where, for the accounting portfolio or main category of assets, the estimation of the impairment for the period results in recognition of net expenses. ‘ Reversals ’ shall be reported where, for the accounting portfolio or main category of assets, the estimation of the impairment for the period results in the recognition of net income. U.K.

15.9. Other Administrative Expenses (16.8) U.K.

208i. ‘ Information Technology expenses ’ shall be the expenses made to deliver IT-enabled business processes, application services and infrastructure solutions for business outcomes, including costs related to the creation and maintenance of IT systems and excluding compensation for IT specialists on the institution’s payroll which shall be reported under staff expenses. U.K.

208ii. Among the Information Technology expenses, ‘ IT outsourcing ’ shall mean IT expenses related to the use of external service providers. It shall not include expenses related to (i) pure staff services (agency staff) to the extent that the institution just hires staff temporarily and keeps full control of the delivered services and (ii) purely standardised operational hardware/software maintenance contracts on merely purchased assets. U.K.

208iii. ‘ Taxes and duties (other) ’ shall include taxes and duties other than (i) taxes related to profit or loss taxes and (ii) taxes and duties from discontinued operations. This item includes taxes and duties such as taxes levied on goods and services and the duties paid by the institution. U.K.

208iv. ‘ Consulting and professional services ’ shall mean expenses made to get expert or strategic advice. U.K.

208v. ‘ Advertising, marketing and communication ’ shall include expenses related to marketing communications activities such as advertising, direct or online marketing, and events. U.K.

208vi. ‘ Expenses related to credit risk ’ shall mean administrative expenses in the context of credit events, such as expenses incurred in respect of taking possession of collateral or legal proceedings. U.K.

208vii. ‘ Litigation expenses not covered by provisions ’ shall mean litigation expenses not related to credit risk that were not covered by an associated provision. U.K.

208viii. ‘ Real estate expenses ’ shall mean expenses for repairs and maintenance that do not improve the use or prolong the useful life of the real estate, as well as utility expenses (water, electricity and heating). U.K.

208ix. Under IFRS, ‘ leasing expenses ’ shall comprise expenses of the lessee due to short-term leases and leases of assets of low value as referred to IFRS 16.5 and 16.6. Under national GAAP, leasing expenses shall comprise expenses of the lessee, where the accounting standard envisages the treatment of lease payments as expenses. U.K.

208x. ‘ Other administrative expenses – Rest ’ shall include all the remaining components of ‘ other administrative expenses ’ , such as administrative and logistic services, postage and transport of documents, surveillance and security services, money counting services and transport. Cash contributions to resolution funds and deposit guarantee schemes shall not be reported in this category since they are reported in a separate row of template 2.] U.K.

Textual Amendments

F1 Substituted by Commission Implementing Regulation (EU) 2020/429 of 14 February 2020 amending Implementing Regulation (EU) No 680/2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (Text with EEA relevance).