Chargeable equity and liabilities: adjustments required for aggregation: foreign banking groups
Paragraph 18 of Schedule 19
This paragraph provides for various amounts to be deducted when calculating the Type A, B and C equity and liabilities of foreign banking groups.
The legislation refers to a ‘relevant member’ which for this purpose means:
- a relevant UK sub group (one that has Type A equity and liabilities)
- a UK resident entity (one that has Type B equity and liabilities)
- a non-UK resident entity (one that has Type C equity and liabilities).
Paragraphs 18(3) and (4) of Schedule 19
Where the members of a relevant UK sub-group are members of a larger UK sub-group, any equity of the relevant UK sub-group that would have been eliminated under normal consolidation procedures under IAS or UK GAAP, had the larger UK sub-group prepared consolidated accounts, can be left out of the calculations.
Paragraphs 18(5) and (6) of Schedule 19
Where a relevant member of a non relevant UK sub-group is a member of one or more UK sub-groups, any equity of the relevant member that would have been eliminated under normal consolidation procedures under IAS or UK GAAP, is left out.
Paragraph 18(7) of Schedule 19
Where a relevant member has liabilities to another relevant member or has liabilities that correspond to assets that are allocated to any UK branch of a bank entity within the same group (that is an entity having Type D chargeable equity and liabilities) these liabilities are left out.