In QRT S.23.02, taxonomy rules imposes that account R0660, “Excess of assets over liabilities attributable to basic own fund items (excluding the reconciliation reserve)” needs to equal the account r0730 “Other basic own funds item in the QRT 23.01. The latter account includes Deferred tax assets and surplus funds.
This validation rule would therefore imply a double count, because deferred tax assets and surplus funds have already been reflected in the excess of assets over net assets rec, specifically in the accounts R600/R610/R620/R630.
Please note that the answer to this questions has been revised as follows:
In template S.23.02 the Reserves from financial statements adjusted for Solvency II valuation differences (C0110/R0650) 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) is then the Reserves from financial statements adjusted for Solvency II valuation differences (C0110/R0650) plus Excess of assets over liabilities attributable to basic own fund items (excluding the reconciliation reserve) (C0110/R0660).
Surplus funds are defined in Art. 91 of SII Directive. They do not constitute insurance and reinsurance liabilities to the extent that they fulfil Tier 1 criteria (Art. 91 para.2). Consequently, Surplus Funds can be split into two parts: One part that is to be considered as BOF which is eligible as Tier 1 and a second part that is to be considered as liability. Therefore, in S.23.01 only the Surplus Funds defined as BOF as foreseen in Art. 91 para 2 are to be reported in R0070. A similar situation may be applied to Deferred Tax Assets.
In relation to DTA and Surplus Fund that is not considered as BOF but as liability, R0650 should reflect the value of the different valuation of DTA between SII and financial statements and the value of Surplus Fund, as the values are considered in the rows reflecting the different valuation (R0600 to R0620).
At the same time, BV505 implies that S.23.02.R0660/C0110 is equal to S.23.01.R0730/C0060. We believe that this equality should apply and is fully in line with the definition of Reconciliation Reserve.
To comply with the explanation above and keep this equality when filling S.23.02 undertakings should:
•In R0600 to R0620/C0100 consider the variation of Surplus Fund that is considered as BOF according to article 91 of the Directive and of the DTA (as defined in article 76 of the Delegated Regulation);
•BV 398, 399 and 400 has been de-activated.
Please be aware that in S.23.02 R0650 = R0600 - R0610 - R0620 + R0630 (+ R0640), where all "increase" of valuation should have a "+" sign and all "decrease" of valuation should have a "-" sign for R0600, R0610 and R0620.