1.For the purposes of Article 70(1), point (b), the amount of foreseeable dividends and distributions shall be determined in accordance with the accrual approach set out in paragraphs 2 to 6 of this Article.
2.The amount of dividends and distributions shall be deemed foreseeable where the administrative, management or supervisory body or the other persons who effectively run the undertaking have formally taken a decision or proposed a decision to the relevant body regarding the amount of dividend or distributions to be paid out.
3.Before the administrative, management or supervisory body, or the other persons who effectively run the undertaking, have formally taken a decision or proposed a decision to the relevant body regarding the amount of dividend or distributions to be paid out, the amount of foreseeable dividend or distributions for the financial year under consideration shall be equal to the sum of the following:
the full amount of the likely dividend or distributions to be paid during the course of the ongoing financial year, corresponding to profits of the previous financial years;
either of the following:
the product of the dividend or distributions pay-out ratio and the cumulative interim profits realised or estimated, as the case may be, between the beginning of the ongoing financial year and the reference date for the calculation of the reconciliation reserve;
the product of the estimated amount of dividend or distributions corresponding to profits for the entire ongoing financial year and the fraction of that financial year that has elapsed up to the reference date for the calculation of the reconciliation reserve.
For the purposes of the first subparagraph, ‘profits’ shall have the same meaning as under the applicable accounting framework.
4.For the purposes of paragraph 3, point (b), the dividend or distributions pay-out ratio or pay-out amount shall be determined on the basis of the dividend or distributions policy approved by the administrative, management or supervisory body. Where the dividend or distributions policy contains a pay-out range instead of a fixed value, the upper end of the range shall be used.
5.In the absence of an approved dividend or distribution policy referred to in paragraph 4, or when, in the opinion of the supervisory authority, it is likely that the undertaking will not apply its dividend or distribution policy, or where that policy is not a prudent basis upon which to determine the amount of deduction, the dividend or distribution pay-out ratio or pay-out amount shall be based on the most prudent approach among the following:
the average dividend or distribution pay-out ratio or amount over the three financial years prior to the ongoing financial year;
the dividend or distribution pay-out ratio or amount of the financial year preceding the ongoing financial year;
relevant public announcements on the pay-out dividends or distributions.
6.The undertaking may exclude from the calculation of the dividends or distributions pay-out ratio or pay-out amount as referred to in paragraph 4, points (a) and (b), exceptional payment or non-payment of dividends or distributions, provided it can demonstrate to the satisfaction of the supervisory authority, that such payment or non-payment is not representative of its dividend or distributions policy or past distribution practices.