Question ID: 1917
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Article: 35
Template: S.23.02
Status: Final
Date of submission: 08 Jul 2019
Question
Following Q&A #776, could you detail the specific items that should be reported on cell R0630/C0110 ('Total of reserves and retained earnings from financial statements') of template S.23.02* ?
With the addition of rule BV890 on taxonomy V2.3.0, some undertakings encounter trouble to reconcile the amounts of their reserves on R0650. R0600 to R0620 are self-explanatory and well-detailed, however regarding amounts in R0630 and R0640, while a reconciliation with the balance sheet would be expected, we can't find any clear indicator of what should be reported.
Can you provide additional details on this matter?
EIOPA answer
R0630 represents the amount of earnings retained by the company (i.e. not distributed as dividend) in the past and current years. It is not a Solvency II concept, but an accounting concept, so the specific items to be included depend on the local GAAP.
It should include the part of the Excess of Assets over Liabilities in accounting that are not included in R0660. E.g. the share capital is included in R0660 and therefore it is not included in R0630, the reserves from financial statements are not included in R0660 and therefore they are included in R0630.
From a logical point of view, S.23.02.01.03 is trying to reconcile accounting and solvency II Excess of Assets over Liabilities (EoAoL).
◦R0660 reflects the amount of basic SII own funds issued by the undertaking (thus, excluding the reconciliation reserve) included in EoAoL. It does not include subordinated liabilities because they are a liability and they do not form part of EoAoL. It does not include any deduction for own shares because own shares are an asset in Solvency II and therefore are included in EoAoL.
◦R0630 reflects the amount of earnings in financial statements as described above.
◦Thus, R0630 + R0660 might be close to accounting EoAoL (S.02.01 C0020/R1000), but there may be some differences, for example due to SII OF items that may be liabilities for accounting purposes. Subordinated liabilities are not an example of a source of differences because they are also liabilities in Solvency II.
◦R0600 to R0620 reflect the differences in valuation from accounting and SII, i.e. adjust accounting EoAoL to get SII EoAoL.
◦R0640 allows to make any adjustment needed. The cell is expected to be empty in most of the cases.