Document ID: chunk:federal_register_of_legislation:F2018L00379:body:0:p11
Version: federal_register_of_legislation:F2018L00379
Segment Type: other
Provision Reference: 
Character Range: 27304–30270

Adjusted balances

For category three facilities, where the collateral satisfies the requirements detailed under category three facilities, or APRA has agreed on an appropriate basis to ascribe value for security purposes, the net amount of the exposure is to be reported in the 'Adjusted balances' column.

For example, where there is an outstanding balance of $100,000, with an assessed security value of $70,000, the net amount of $30,000 is to be reported in the 'Adjusted balances' column.  The outstanding balance of $100,000 should be reported in the 'Outstanding balances' column in these cases.

Delinquency trends

To provide APRA with greater insight into delinquency trends within ADIs applying the prescribed provisioning methodology, ADIs are required to separately report past due facilities in time buckets below that triggering prescribed provisioning.  APRA is particularly interested in those category two and three facilities that are  30 days and less than 60 days and 60 and less than 90 days worth of payments past due and asks ADIs to report accordingly.

Impaired facilities return

From the cessation of the transition period following the harmonised prudential standards released in September 2000, all ADIs operating in Australia are required to complete ARF 220.0 Impaired Facilities (ARF 220.0).  ADIs preparing ARF 220.3 must ensure that data reported to APRA is consistent with that shown on ARF 220.0 for the relevant quarter.  ADIs are advised to revisit APS 220 which provides the key definitions of impairment to ensure that they operate in accordance with prudential reporting requirements.

ADIs applying the prescribed provisioning approach should be particularly alert to reporting requirement of a non-accrual item triggered as a consequence of a specific provision having been raised against that item.  Given APRA defines all provisions prescribed in terms of APS 220.0 as specific provisions for prudential supervisory purposes, ADIs must report items against which it holds a prescribed provision as non-accrual.  Particular care needs to be taken to ensure that any category four facilities for which a provision is prescribed prior to it being 90 days irregular are reported as a non‑accrual item.

APRA also encourages ADIs to take particular care in reporting those facilities defined as being individually managed and 90 days worth of contracted payments are past due although these facilities might be regarded as well-secured.  Such facilities need to be reported in Part B of ARF 220.0. Although not non‑accrual by definition, these items represent a higher risk of default than facilities operating within contractual terms.  Facilities categorised as category one for prescribed provisioning purposes are potential candidates to be reported in Part B of ARF 220.0.

    [1]  The definitions of 'credit union' and 'other ADI' in paragraph 17 of this Reporting Standard provide that Cairns Penny Savings