Banking Act 1959 - Making of Prudential Standards: APS 110 - Capital Adequacy; APS 111 - Capital Adequacy: Measurement of Capital; APS 221 - Large Exposures; APS 222 - Associations with Related Entities (25/11/2002)
AGN 110.2 - Non-consolidated SubsidiarieAGN 110.2 - Non-consolidated Subsidiaries
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AGN 110.2 - Non-consolidated Subsidiaries
- For the purposes of determining an ADI’s capital adequacy at the consolidated banking group level (i.e. Level 2), all banking and other financial activities (both regulated and unregulated) conducted within the banking group must be consolidated.
- Consolidation at Level 2 should be conducted in accordance with Australian accounting standards. This should cover the global operations of an ADI and its subsidiary entities, as well as any other controlled banking entities, securities entities and other financial entities (e.g. finance companies, money market corporations, stockbrokers and leasing companies), except for entities involved in the following business activities:
(a) insurance businesses (including friendly societies and health funds);
(b) acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds management or the securitisation of assets; and
(c) non-financial (commercial) operations.
- Group entities excluded from Level 2 consolidation are to be deducted from an ADI’s Level 2 capital in accordance with paragraph 9 of APS 111 – Capital Adequacy: Measurement of Capital and AGN 111.4 – Capital Deductions.