Question
In FINREP template 8.1 "Breakdown of financial liabilities" (EBA/ITS/2014/05 as of 30/07/2014) hedge accounting derivatives are not included in validation v1740_m, although they qualify as financial liabilities in terms of IAS 39.
Background on the question
The definition of derivatives (Annex V.Part 1.28, 2.107, 2.108) in template 20.6 "Geographical breakdown of liabilities by residence of the counterparty" apparently makes no difference between those derivatives reported in template 8.1 (after corrected FINREP draft in July 2014). However, validation v1740_m ({F 20.06, r010, c010, (sNNN)}) = xsum({F 08.01.a, (r010, c010, c034)}) requires the geographical breakdown only for held for trading derivatives without hedge accounting, except non-trading derivatives which do not qualify for hedge accounting. Subsequently, hedge accounting derivatives shall not be considered.
Answer
Cell {r010; c010} of template F 20.06 of Annex III of Regulation (EU) No 680/2014 - ITS on supervisory reporting includes hedging derivatives. Accordingly, validation rule v1740_m is not correct and will be deactivated and amended in a future version of the ITS on supervisory reporting.