Q&A

Question

Please clarify this reconciliation.

If I follow the instructions for boxes Q1 to Q6 I calculate the Excess of assets over liabilities value which equals L27 on the balance sheet.
But then Q7 is meant to be B26 from the Own Funds form (Other basic own fund items) and
Q8 is meant to be Q8 from the Own funds form (Excess of assets over liabilities).
Hence my reconciliation for a very simple company results in having the same value in Q6, Q7 and Q8 despite the formula that Q6 + Q7 = Q8.

Please could you explain how you expect this reconciliation to work.

EIOPA answer

In template S.23.02 the Reserves from financial statements adjusted for Solvency II valuation differences (C0110/R0650 – old Q6) is explained by its different components of different valuations and total of reserves and retained earnings from financial statements.
The Solvency II EoAoL (C0110/R0700 – old Q8) is then the Reserves from financial statements adjusted for Solvency II valuation differences (C0110/R0650 – old Q6) plus Excess of assets over liabilities attributable to basic own fund items (excluding the reconciliation reserve) (C0110/R0660 – old Q7).

We don’t understand how the value of C0110/R0650 – old Q6 “Reserves from financial statements adjusted for Solvency II valuation differences”, which reflect the differences in valuation plus reserves can be the same value as C0110/R0660 – old Q7 “Excess of assets over liabilities attributable to basic own fund items (excluding the reconciliation reserve)”. Please note that the latter is excluding the Reconciliation Reserve.

In template S.23.01 the reconciliation reserve is calculated departing from the EoAoL and deducting what is not differences in valuation, leading to the Reconciliation Reserve (which basically includes the differences in valuation).

Please note that only the following validations were included:
BV551: S.23.01.C0060/R0760 (old B29) = S.23.01.C0060/R0700 (old B23) – S.23.01.C0060/R0710 (old B24) – S.23.01.C0060/R0720 (old B25) – S.23.01.C0060/R0730 (old B26) – S.23.01.C0060/R0740 (old B27)
BV505: S.23.02.C0110/R0660 (old Q7) = S.23.01.C0060/R0730 (old B26)
In addition the following are considered the same data points:
S.23.02.C0110/R0700 (old Q8) = S.23.01.C0060/R0700 (old B23)
The old validation of C0110/R0650 – old Q6 was wrong and the correct one is: C0110/R0650 (old Q6) = C0110/R0600 (old Q1) – C0110/R0610 (old Q2) – C0110/R0620 (old Q3) + C0110/R0630 (old Q4) (+ C0110/R0640 (old Q5). However please note that this validation is not part of the validations file to be complied with.