(7)Part II of Annex I to Directive 2002/87/EC sets out three technical methods for calculating capital adequacy requirements at the level of the financial conglomerate: ‘Accounting consolidation method’ (method 1), ‘Deduction and aggregation method’ (method 2) and ‘Combination method’ (method 3), allowing the combination of method 1 and method 2. The technical calculation methods 1 and 2 should be specified to ensure their consistent application. In addition, the circumstances for the use of method 3 should be specified and it should be ensured that the competent authorities permit the use of that method in similar circumstances, apply common criteria and require that method to be applied in a way which is consistent across financial conglomerates. The competent authorities should only allow the application of method 3 where a financial conglomerate can demonstrate that the application of method 1 or 2 alone would not be reasonably feasible. The use of method 3 should be consistent over time to ensure equivalent conditions. As the technical calculation methods are carried out in accordance with the technical principles referred to in Part I of Annex I to Directive 2002/87/EC, it is necessary to specify those principles as well.