Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p19
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 47072–49919

floating charge
 1. Subject to paragraph 26 of this Attachment, a regulated institution must deduct all assets of the regulated institution that are under a fixed or floating charge[19], mortgage or other security to the extent of the indebtedness secured on those assets. This deduction may be reduced by the amount of any liability for the charge that is recognised on the regulated institution's balance sheet.
 2. Where the security referred to in paragraph 25 of this Attachment exclusively supports a regulated institution's insurance liabilities, the deduction only applies to the amount by which the fair value of the charged assets exceeds the regulated institution's supported insurance liabilities. These insurance liabilities are to be valued in accordance with GPS 340.

Fair value adjustments
 1. A regulated institution must deduct the difference between fair value and the reported value of each asset. This deduction can be a negative amount (that is, an addition to Common Equity Tier 1 Capital) if fair value exceeds reported value.
 2. A regulated institution may measure its non-financial assets, short-term receivables, and intercompany receivables and payables using the requirements in Australian Accounting Standards rather than fair value.
 3. A regulated institution must make any other deduction required by APRA in writing where APRA considers that fair values are not prudent or reliable.

Other adjustments
 1. A regulated institution must make any other deductions required under any other Prudential Standard.

Attachment C – Criteria for inclusion in additional Tier 1 Capital
 1. To be classified Additional Tier 1 Capital, an instrument must satisfy all the criteria in this Attachment.
 2. The instrument must be paid-up and the amount must be irrevocably received by the issuer.
 3. The instrument represents, prior to any conversion to Common Equity Tier 1 Capital (refer to Attachment E), the most subordinated claim in liquidation of the issuer after Common Equity Tier 1 Capital instruments. Where an issuer is a holding company, any claim in relation to the instrument must be subordinate to the claims of general creditors of the holding company.
 4. The paid-up amount of the instrument, or any future payments related to the instrument, is neither secured nor covered by a guarantee of the issuer or related entity, or other arrangement that legally or economically enhances the seniority of the holder's claim. The instrument may not be secured or otherwise subject to netting or offset claims on behalf of the holder or the issuer of the instrument.
 5. The principal amount of the instrument is perpetual (i.e. it has no maturity date).[20]
 6. The instrument contains no step-ups or other incentives to redeem. The issuer and any other member of a group to which the issuer belongs must not create