IFRIC 22 and PRA buffer: Difference between pages

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''Financial reporting - foreign exchange''
''Capital adequacy - UK''.


IFRIC 22 is an Interpretation of IAS 21 (The Effects of Changes in Foreign Exchange Rates).
The PRA buffer is an amount of capital which UK-regulated banks are required to hold, determined following stress testing.


The Interpretation deals with consideration paid or receive in advance.
The amount is determined by the UK regulator, the Prudential Regulation Authority (PRA), following consultation with the regulated bank.


It covers foreign currency transactions when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income.


Any PRA buffer which the regulator may set is additional to Individual Capital Guidance (ICG).


Under IFRIC 22:


*The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.  
The PRA buffer is sometimes known as the 'Pillar 2B' buffer.


*If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.
The PRA buffer replaced the former 'capital planning buffer'.
 
 
Effective from January 2018.




== See also ==
== See also ==
* [[Foreign exchange]]
* [[Buffer]]
* [[IAS 21]]
* [[Capital adequacy]]
* [[IFRIC]]
* [[Idiosyncratic stress]]
* [[International Financial Reporting Standards]]
* [[Individual Capital Guidance]]
 
* [[Pillar 2]]
[[Category:Compliance_and_audit]]
* [[Prudential Regulation Authority]]
* [[Reverse stress test]]
* [[Scenario analysis]]
* [[Shock]]
* [[Stress]]

Revision as of 15:06, 29 October 2016

Capital adequacy - UK.

The PRA buffer is an amount of capital which UK-regulated banks are required to hold, determined following stress testing.

The amount is determined by the UK regulator, the Prudential Regulation Authority (PRA), following consultation with the regulated bank.


Any PRA buffer which the regulator may set is additional to Individual Capital Guidance (ICG).


The PRA buffer is sometimes known as the 'Pillar 2B' buffer.

The PRA buffer replaced the former 'capital planning buffer'.


See also

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