Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p9
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 20776–23576

For the purposes of paragraph 36(b) any other reserves associated with share- based payments must be excluded from the capital base.
 1. Revaluation of property holdings on the balance sheet may be included as part of other disclosed reserves only if:
 2. the property is owned by the regulated institution or member of the Level 2 insurance group at Level 2;
 3. the property comprises only land and buildings;
 4. the property is readily available to be sold. A property need not be scheduled for sale, nor need a sale be intended. However, such a property must be capable of being readily sold within six months were a decision made to sell the property;
 5. the reserves are shown as a component of equity in the audited published financial accounts of the regulated institution;
 6. the revaluations are reliable, in accordance with Australian Accounting Standards, and subject to audit or review consistent with Australian Auditing and Assurance Standards. A property must be measured at fair value in accordance with Australian Accounting Standards; and
 7. the amount of reserves incorporates the full effect of any fair value gains or losses and any gains or losses on hedges offsetting revaluations of the property included in the reserves.

Additional Tier 1 Capital
 1. Additional Tier 1 Capital comprises high quality components of capital that satisfy the following essential characteristics:
 2. provide a permanent and unrestricted commitment of funds;
 3. are freely available to absorb losses;
 4. rank behind the claims of policyholders and other more senior creditors in the event of winding-up of the issuer; and
 5. provide for fully discretionary capital distributions.
 6. Additional Tier 1 Capital consists of:
 7. instruments issued by a regulated institution that are not included in Common Equity Tier 1 Capital and which meet:
     1. the criteria for inclusion in Additional Tier 1 Capital set out in Attachment C to this Prudential Standard; and
     2. the requirements for loss absorption at the point of non-viability set out in Attachment E to this Prudential Standard; and
 8. regulatory adjustments applied in the calculation of Additional Tier 1 Capital as required under Attachment B to this Prudential Standard.

Tier 2 Capital
 1. Tier 2 Capital includes other components of capital that, to varying degrees, fall short of the quality of Tier 1 Capital but nonetheless contribute to the overall strength of a regulated institution and its capacity to absorb losses.
 2. Tier 2 Capital consists of:
 3. instruments issued by the regulated institution that meet:
 4. the criteria for inclusion in Tier 2 Capital set out in Attachment D to this Prudential Standard; and
 5. the requirements for loss absorption at the point of non-viability set out in Attachment