Reporting Form ARF Intra-Group Receivables and Payables Instruction Guide

Transcription

1 Reporting Form ARF Intra-Group Receivables and Payables Instruction Guide General directions and notes Reporting entity The Intra-Group Receivables and Payables form is to be completed by all locally incorporated banks and Foreign ADIs (other than specialist credit card institutions) on a Domestic Books basis. The Domestic books of the locally incorporated banks and Foreign ADIs relates to the Australian books of the Australian ADI and has the following scope: Is an unconsolidated report of the Australian licensed ADI's operations/transactions that are booked inside Australia. Exclude offshore branches of the Australian licensed ADI from this reporting unit. Exclude offshore banking units based overseas from this reporting unit. Do not consolidate Australian and offshore controlled entities or associated entities that are not ADIs. Include Australian based offshore banking units of the licensed ADI. Include transactions with non-residents recorded on Australian books. Securitisation Deconsolidation Principle Except where stated otherwise on this form, reporting entities must treat any securitisation program SPVs in which the ADI (or a member of its consolidated group) participates in accordance with APRA s clean sale and separation requirements as non-consolidated independent third parties. As a result, for reporting purposes all assets, liabilities, revenues and expenses of these SPVs must be excluded from the ADI s reported amounts. Where relevant, report on this form any exposure to or other transaction between the ADI and any such SPV as if such transaction was conducted with an independent third party, regardless of whether the SPV or its assets is consolidated for accounting purposes. APRA's clean sale and separation requirements are set out in APS 120 Funds Management and Securitisation and related Guidance Notes AGN Purchase and Supply of Assets (including Securities Issued by SPVs) and AGN Disclosure ARF Instructions - 1

2 and Separation. Whenever the clean sale and separation requirements are not met, all the assets, liabilities, revenues and expenses of the SPV are to be consolidated with the ADI s reported amounts. Reporting period The form is to be completed as at the last day of the stated reporting quarter. Locally incorporated banks and Foreign ADIs should submit the completed form to APRA within 20 business days after the end of the relevant reporting quarter. Unit of measurement Banks are asked to complete the form in millions of Australian dollars rounded to one decimal place. Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates. The general requirements of AASB 121 The Effects of Changes in Foreign Exchange Rates for translation are: 1. Foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date Foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined. Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement. However, those foreign currency derivatives that are not within the scope of AASB 139 Financial Instruments: Recognition and Measurement (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121 The Effects of Changes in Foreign Exchange Rates. For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement. As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date. 1 Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Spot rate means the exchange rate for immediate delivery. 2 Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset. ARF Instructions - 2

3 Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity. The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss. 4. Translation of financial reports of foreign operations. A foreign operation is defined in AASB 121 The Effects of Changes in Foreign Exchange Rates as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity. Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity. Translation of financial reports should otherwise follow the requirements in AASB 121 The Effects of Changes in Foreign Exchange Rates. Timing Report assets and liabilities, and transactions in assets and liabilities as at the date of change of ownership. Netting Unless otherwise specifically stated, institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 139: Financial Instruments: Recognition and Measurement, AASB 132: Financial Instruments: Disclosure and Presentation and AASB 7 Financial Instruments : Disclosures and any relevant prudential standards. Term to maturity References to term to maturity in this form are references to original term to maturity Basis of preparation Unless otherwise specifically stated, institutions are to comply with Australian accounting standards regarding the measurement of asset, liability and equity items. ARF Instructions - 3

4 Specific instructions Refer to the sector definitions in the ARF Statement of Financial Position (Domestic Books) instructions as a general guide for reporting by sector. Related parties: Related parties of the reporting entity include the parent entity, controlled entities, associated entities, joint venture entities and other branches under the same parent entity. Intra-group loans and advances Report all loans and advances to related parties that are resident entities. Loans and advances are defined in the ARF Statement of Financial Position (Domestic Books) instructions. For the purpose of this form, intra-group loans and advances should be recognised gross of provisions for impairment. Loans and advances should be recorded net of unearned revenue; this is mainly with respect to unearned lease receivables. Netting is permitted in accordance with the requirements of the Australian accounting standards (i.e. were there is a legal right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the assets and settle the liability simultaneously). Note: Loans and advances are investments of the ADI, which are deemed for this form not to be evidenced by the financing/issue of debt securities (e.g. bill financing). Include: Loans to related parties that are resident (i.e. loans included in Intra-group loans and advances on ARF Statement of Financial Position (Domestic Books)). Exclude: Holdings of debt securities issued by related parties that are resident entities; and Other accounts receivable (e.g. fees & commissions receivable) from related parties that are resident entities. Intra-group deposits Report deposits and other borrowings from related parties that are resident entities. Include: Deposits and other borrowings from related parties that are resident entities (i.e. deposits and other borrowings included in Intra-group deposits on ARF Statement of Financial Position (Domestic Books)). ARF Instructions - 4

5 Exclude: Debt securities issued to related parties that are resident entities; and Other accounts payable (e.g. fees & commissions payable) from related parties that are resident entities. Reconciliation with ARF Statement of Financial Position (Domestic Books) Total intra-group loans and advances Total intra-group loans and advances (ARF Intra-Group Receivables and Payables) Equals Intra-group loans and advances Total (gross of provisions for impairment) (ARF Statement of Financial Position (Domestic Books)). Total intra-group deposits Total intra-group deposits (ARF Intra-Group Receivables and Payables) Equals Intra-group deposits Total (ARF Statement of Financial Position (Domestic Books)). ARF Instructions - 5