Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p7
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 16107–19043

D to this Prudential Standard.
32.         Current year earnings must take into account:
(a)          negative goodwill;
(b)          the unwinding of any discount on credit loss provisions;
(c)          expected tax expenses; and
(d)          dividends when declared in accordance with Australian Accounting Standards.
33.         Declared dividends for the purpose of paragraph 32(d) of this Prudential Standard may be reduced by the expected proceeds, as agreed by APRA, of a Dividend Reinvestment Plan (DRP) to the extent that dividends are used to purchase new ordinary shares issued by the ADI. An ADI must review every six months the expected subscription for new ordinary shares under its DRP, having regard to experience over previous years and reasonable expectations of the level of subscription that might apply in future. If an ADI identifies any material change in the expected level of future subscription for new ordinary shares under its DRP, it must notify APRA and obtain APRA's approval to a new amount by which declared dividends may be reduced for Regulatory Capital purposes.
34.         Current year earnings also include the full value of fee income provided that:
(a)          the fee income has either been received in cash or has been debited to a customer's account or otherwise forms part of the upfront fees owed by a customer;
(b)          outstanding amounts of fee income debited to customer accounts are claimable in full in the event of default by the customer, or capable of being sold to a third party as part of outstanding debts;
(c)          the provider of the fee income has no recourse for repayment in part or full of any prepaid income;
(d)          the customer cannot cancel any fees debited to the customer's account for which they were otherwise obliged to pay upfront; and
(e)          there is no requirement for the provision of continuing additional services or products associated with the fee income concerned.
35.         Fee income may include net positive amounts arising from the netting of deferred or future income and capitalised expenses associated with a product class provided the conditions in paragraph 34 of this Prudential Standard are satisfied. Any deferred income or future income that do not satisfy the conditions in paragraph 34, if not already excluded from current year or retained earnings, must be deducted from Common Equity Tier 1 Capital.
36.         Current year earnings and retained earnings may include fair value adjustments provided these adjustments satisfy the requirements for the recognition of fair values set out in Attachment A and Attachment D to this Prudential Standard.
37.         Accumulated other comprehensive income and other disclosed reserves include, but are not limited to:
(a)          unrealised gains or losses relating to investment securities;
(b)          reserves from equity-settled share-based payments (share or share