Document ID: chunk:federal_register_of_legislation:F2018L00369:body:0:p5
Version: federal_register_of_legislation:F2018L00369
Segment Type: other
Provision Reference: 
Character Range: 11381–14360

in Reporting Form ARF 110.0 Capital Adequacy (ARF 110.0).

    2.             Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that does not meet APRA's operational requirements for regulatory capital relief under APS 120, or the ADI undertakes a funding-only securitisation or synthetic securitisation, such assets are to be reported as on-balance sheet in APRA's regulatory reporting returns. In addition, these exposures must also be reported as a part of the ADI's total securitised assets within Reporting Form ARF 120.2 Securitisation – Supplementary Items.

Reporting period

The form is to be completed as at the last day of the stated reporting quarter. Australian-owned banks and foreign subsidiary banks should submit the completed form to APRA within 20 business days after the end of the relevant reporting quarter.

Unit of measurement

Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).

The general requirements of AASB 121 for translation are:

     1. foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[3]

     2. 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;[4]

     3. 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 (AASB 139).  However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.

    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.

    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; and

    4.             translation of financial reports of foreign operations.

    A foreign operation is