Part General instructions - Financial Sector (Collection of Data) (reporting standard) determination No. 114 of 2023 - General instructions

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Reporting Standard LRS 112.0

Determination of Capital Base

General instructions

Reporting tables

Tables described in this Reporting Standard list each of the data fields required to be reported. The data fields are listed sequentially in the column order that they will appear in the reported data set.

Definitions

Terms highlighted in bold italics indicate that the definition is provided in these instructions.

A

Accumulated other comprehensive income and other disclosed reserves	This is the sum of all other comprehensive income and disclosed reserves and is calculated as the sum of:unrealised gains or losses recognised on balance sheet;reserves from equity-settled share-based payments;cumulative unrealised gains or losses on hedges offsetting gains or losses in Common Equity Tier 1 Capital;foreign currency translation reserve;general reserve; andother gains and losses in accumulated comprehensive income and other disclosed reserves.
Additional tax benefits / (liabilities) from liability adjustments	This is the value of all tax effects associated with liability adjustments before any tax effects.Tax benefits reduce liability adjustments whereas tax liabilities increase liability adjustments.Full tax benefits / liabilities must be assumed for the purposes of reporting this item but life companies must adjust deferred tax assets and / or liabilities by the tax benefits / liabilities for the purposes of assessing the adjustment for excess of deferred tax assets over deferred tax liabilities.
Additional Tier 1 Capital	This is the value of capital instruments issued by the life company that meet the criteria for inclusion in Additional Tier 1 Capital in accordance with the relevant prudential standard, and which are not included in Common Equity Tier 1 Capital. This is net of regulatory adjustments specified in LPS 112.Additional Tier 1 Capital is calculated as the sum of:Additional Tier 1 Capital instruments;adjustments and exclusions to Additional Tier 1 Capital;transitional Additional Tier 1 Capital; andexcess mutual equity interestsless:holdings of own Additional Tier 1 Capital instruments; andadjustments to Additional Tier 1 Capital due to shortfall in Tier 2 capital.
Additional Tier 1 Capital instruments	This is the value of capital instruments issued by the life company that meet the eligibility criteria for Additional Tier 1 Capital but not the criteria for the higher quality capital, i.e. Common Equity Tier 1 Capital.

Capital base	This is the amount of capital eligible for the purpose of meeting the Prudential Capital Requirement as set out in Prudential Standard LPS 110 Capital Adequacy.For a life company, capital base is calculated as the sum of:Tier 1 Capital; andTier 2 Capital.For a fund, capital base is calculated as the sum of:net assets of the fund;seed capital transferred from management fund;other adjustments to net assets as approved by APRA; andTier 2 Capitalless:regulatory adjustments to net assets.
Capital base (net of Tier 2 Capital) ratio	Capital base (net of Tier 2 Capital) ratio for a fund is calculated as:capital base less Tier 2 Capital;divided by:prescribed capital amount.
Claims payable	This is the amount related to claims due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17 Insurance Contracts (AASB 17).Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item increases liability adjustments.
Common Equity Tier 1 Capital	This is the highest quality component of capital within the life company as determined under the eligibility criteria as set out in LPS 112, net of all regulatory adjustments.Common Equity Tier 1 Capital is calculated as the sum of:adjustments and exclusions to Common Equity Tier 1 Capital;paid-up ordinary shares;mutual equity interests;retained earnings;undistributed current year earnings; andaccumulated other comprehensive income and other disclosed reservesless:regulatory adjustments to Common Equity Tier 1 Capital.
Common Equity Tier 1 Capital ratio	Common Equity Tier 1 Capital ratio is calculated as:Common Equity Tier 1 Capital;divided by:prescribed capital amount.
Cumulative unrealised gains or losses on hedges offsetting gains or losses in Common Equity Tier 1 capital	This is the cumulative unrealised gains or losses on hedges offsetting the gains or losses of components of Common Equity Tier 1 Capital.This includes cumulative unrealised gains or losses on effective cash flow hedges as defined in the Australian Accounting Standards and any fair value gains or losses on derivatives representing effective economic hedges of assets.

Capital base

This is the amount of capital eligible for the purpose of meeting the Prudential Capital Requirement as set out in Prudential Standard LPS 110 Capital Adequacy.For a life company, capital base is calculated as the sum of:Tier 1 Capital; andTier 2 Capital.For a fund, capital base is calculated as the sum of:net assets of the fund;seed capital transferred from management fund;other adjustments to net assets as approved by APRA; andTier 2 Capitalless:regulatory adjustments to net assets.

Capital base (net of Tier 2 Capital) ratio

Capital base (net of Tier 2 Capital) ratio for a fund is calculated as:capital base less Tier 2 Capital;divided by:prescribed capital amount.

Claims payable

This is the amount related to claims due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17 Insurance Contracts (AASB 17).Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item increases liability adjustments.

Common Equity Tier 1 Capital

This is the highest quality component of capital within the life company as determined under the eligibility criteria as set out in LPS 112, net of all regulatory adjustments.Common Equity Tier 1 Capital is calculated as the sum of:adjustments and exclusions to Common Equity Tier 1 Capital;paid-up ordinary shares;mutual equity interests;retained earnings;undistributed current year earnings; andaccumulated other comprehensive income and other disclosed reservesless:regulatory adjustments to Common Equity Tier 1 Capital.

Common Equity Tier 1 Capital ratio

Common Equity Tier 1 Capital ratio is calculated as:Common Equity Tier 1 Capital;divided by:prescribed capital amount.

Cumulative unrealised gains or losses on hedges offsetting gains or losses in Common Equity Tier 1 capital

This is the cumulative unrealised gains or losses on hedges offsetting the gains or losses of components of Common Equity Tier 1 Capital.This includes cumulative unrealised gains or losses on effective cash flow hedges as defined in the Australian Accounting Standards and any fair value gains or losses on derivatives representing effective economic hedges of assets.

Eligible Tier 2 Capital instruments	This is the value of capital instruments issued by the fund or life company that meet the eligibility criteria of Tier 2 Capital in LPS 112.
Excess mutual equity interests	This is the value of any mutual equity interests that are above the limit specified in LPS 112 (that is, the value of any mutual equity interests on issue that are not eligible for inclusion in Common Equity Tier 1 Capital).For the purposes of this item, only include proceeds of issues that have been received by the issuer. Any partly paid issue is reported only to the extent that it has been paid-up.
Excess of deferred tax assets over deferred tax liabilities	This is the amount of deferred tax assets (DTA) in excess of deferred tax liabilities (DTL) within the fund or life company as per the requirement of LPS 112.This assumes that deferred tax benefits in one fund can be offset by the deferred tax liabilities of another fund provided that the offset is only used once across both funds.The DTA and DTL include any tax effect arising from liability adjustments but exclude the tax effects arising from the asset and insurance stress scenarios considered. For example, the DTA must be increased by the tax benefit arising from liability adjustments whereas the DTL must be increased by the tax liability arising from liability adjustments.The netting of DTA and DTL must only be applied where the life company has a legally enforceable right to set-off current tax assets against current tax liabilities.

Fair value adjustments	A regulated institution must deduct the difference between fair value and the reported value of each asset as per the requirements of LPS 112.
Fair value gains and losses from changes in own creditworthiness	This is the unrealised gains (and losses) from changes in the fair values of the liabilities of the fund or life company due to changes in creditworthiness of the life company.
Foreign currency translation reserve	This is the value, of the reserve relating to exchange rate differences arising on translation of assets and liabilities to the presentation currency in accordance with Australian Accounting Standards.

General reserve	General reserves are created from the appropriation of profits by the life company after the payment of all dividends and tax.
Goodwill and other intangible assets	This is the value of goodwill and any other intangible assets, as per LPS 112, net of adjustments to profit or loss reflecting changes arising from any impairment and amortisation.This also includes the component of investments in certain categories of subsidiaries, joint ventures and associates (as per LPS 112) that represents goodwill and any other intangible assets.

Holdings of own Additional Tier 1 Capital instruments	This is the total effective holdings of own Additional Tier 1 Capital instruments issued by the life company unless exempted by APRA or eliminated under Australian Accounting Standards.
Holdings of own Common Equity Tier 1 Capital instruments	This is the total effective holdings of own Common Equity Tier 1 Capital instruments issued by the life company, unless exempted by APRA or eliminated under Australian Accounting Standards.This item must also include:capital instruments the life company could be contractually obliged to purchase; andunused portion of the limits agreed with APRA as per the requirements of LPS 112.
Holdings of own Tier 1 Capital instruments	This is the total effective holdings of own Tier 1 Capital instruments that were issued by the life company. This includes Common Equity Tier 1 Capital and Additional Tier 1 Capital instruments held by the life company unless exempted by APRA or eliminated under Australian Accounting Standards.
Holdings of own Tier 2 Capital instruments	This is the total effective holdings of own Tier 2 Capital instruments issued by the fund or life company unless exempted by APRA or eliminated under Australian Accounting Standards.

Net assets (less equity components classified as Additional Tier 1 Capital)	For a life company, this is net assets of the life company as reported in the balance sheet after deducting for any equity components classified as Additional Tier 1 Capital.
Net assets of the fund	This is net assets of the fund as reported in the balance sheet.
Net assets of the fund (after seed capital adjustments)	For a fund, this is net assets of the fund as reported in the balance sheet after making the following adjustments.For a friendly society benefit fund, this item includes seed capital transferred to the benefit fund from the management fund.For the friendly society management fund, this item excludes seed capital that is a receivable from a benefit fund.
Net assets plus Additional Tier 1 Capital ratio	For a life company, net assets plus Additional Tier 1 Capital ratio is calculated as the sum of:Additional Tier 1 Capital; andnet assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.
Net assets ratio	For a fund, net assets ratio is calculated as:net assets of the fund (after seed capital adjustments) multiplied by 1.2divided by:prescribed capital amount.For a life company, net assets ratio is calculated as:net assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.

Other accounts payable	This is the amount related to other amounts due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17. This may include (but is not limited to) rebates, fees and commissions.Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item increases liability adjustments.
Other accounts receivable	This is the amount related to other amounts due but not yet received which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17. This may include (but is not limited to) rebates, fees and commissions.Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item reduces liability adjustments.
Other adjustments to net assets as approved by APRA	This is the total value of any other regulatory adjustments to the net assets of the fund that does not fall into the other categories for the purpose of LPS 112.
Other Common Equity Tier 1 capital adjustments	This is the value of deductions from Common Equity Tier 1 Capital that the life company must make under any prudential standards other than LPS 112.
Other gains and losses in accumulated comprehensive income and other disclosed reserves	This is the value of any other gains and losses in accumulated comprehensive income and other disclosed reserves that may be specified in writing by APRA as per LPS 112.
Other net asset adjustments	This is the value of deductions from the net assets that the fund must make as required under any prudential standards other than LPS 112.

Paid-up ordinary shares	This is the value of paid-up ordinary shares issued by the life company that meets the criteria for classification as ordinary shares for regulatory purposes in accordance with LPS 112.
Premiums receivable	This is the amount related to insurance premiums due but not yet received which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17.Premiums should be gross of reinsurance and commissions, before profit share rebates, and inclusive of stamp duty, policy fees, loadings and discounts. This definition is consistent with the definition of premium defined in Reporting Standard LRS 750.0 Claims and Disputes (LRS 750.0). Life companies may use approximate methods to report this item if premiums which meet the outlined definition are not readily available (corresponding adjustments also need to be made in other accounts receivable or other accounts payable).Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item reduces liability adjustments.
Prescribed capital amount	Prescribed capital amount is defined in LPS 110.
Prescribed capital amount coverage	Prescribed capital amount coverage is calculated as:capital base;divided by:prescribed capital amount.
Prescribed capital amount coverage (net assets)	For a fund, prescribed capital amount coverage (net assets) is calculated as the sum of:net assets of the fund (after seed capital adjustments) multiplied by 1.2; andTier 2 Capitaldivided by:prescribed capital amount.For a life company, prescribed capital amount coverage (net assets) is calculated as the sum of:Additional Tier 1 Capital;Tier 2 Capital; andnet assets (less equity components classified as Additional Tier 1 Capital) multiplied by 1.2divided by:prescribed capital amount.

Regulatory adjustments to Common Equity Tier 1 capital	This is the total amount of regulatory adjustments applied to the life company's Common Equity Tier 1 Capital specified in LPS 112.Regulatory adjustments to Common Equity Tier 1 Capital is calculated as the sum of:holdings of own Common Equity Tier 1 Capital instruments;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill and other intangible assets;surplus in defined benefit superannuation funds;deficit in defined benefit superannuation funds;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiary, JV and associate;assets under a fixed or floating charge;liability adjustments;fair value adjustments;adjustments to Common Equity Tier 1 Capital due to shortfall in Additional Tier 1 capital; andother Common Equity Tier 1 Capital adjustments.
Regulatory adjustments to net assets	This is the total amount of regulatory adjustments applied on the fund's net assets specified in LPS 112.Regulatory adjustments to net assets is calculated as the sum of:holdings of own Tier 1 Capital instruments;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill and other intangible assets;surplus in defined benefit superannuation funds;deficit in defined benefit superannuation funds;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiary, JV and associate;assets under a fixed or floating charge;liability adjustments;fair value adjustments;adjustments to net assets of the fund due to shortfall in Tier 2 capital;other net asset adjustments; andseed capital receivable from approved benefit fund.
Regulatory capital requirement of investments in subsidiaries, JVs and associates	This is the deduction for regulatory capital requirement for investments in subsidiaries, joint ventures and associates as detailed in LPS 112.
Reinsurance assets not subjected to an executed and legally binding contract	This is the value of reinsurance assets (if positive) related to each reinsurance arrangement that, subject to a six-month grace period from risk inception, does not comprise an executed and legally binding contract.
Reinsurance premiums payable	This is the amount related to reinsurance premiums due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17.Premiums should be gross of commissions, before profit share rebates, and inclusive of stamp duty, policy fees, loadings and discounts. This definition is consistent with the definition of premium defined in LRS 750.0. Life companies may use approximate methods to report this item if premiums which meet the outlined definition are not readily available (corresponding adjustments also need to be made in other accounts receivable or other accounts payable).Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item increases liability adjustments.
Reinsurance recoveries receivable	This is the amount related to reinsurance recoveries due but not yet received which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17.Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item reduces liability adjustments.
Reserves from equity-settled share-based payments	This is the value of reserves from equity-settled share-based payments granted to employees as part of their remuneration package that meets the requirements of LRS 112. This only includes reserves relating to issue of new shares.
Retained earnings	This is the retained earnings consistent with the reported amount in the balance sheet. For friendly societies, this item includes unallocated benefit fund reserves. Do not include the amount of undistributed current year earnings.

Regulatory adjustments to Common Equity Tier 1 capital

This is the total amount of regulatory adjustments applied to the life company's Common Equity Tier 1 Capital specified in LPS 112.Regulatory adjustments to Common Equity Tier 1 Capital is calculated as the sum of:holdings of own Common Equity Tier 1 Capital instruments;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill and other intangible assets;surplus in defined benefit superannuation funds;deficit in defined benefit superannuation funds;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiary, JV and associate;assets under a fixed or floating charge;liability adjustments;fair value adjustments;adjustments to Common Equity Tier 1 Capital due to shortfall in Additional Tier 1 capital; andother Common Equity Tier 1 Capital adjustments.

Regulatory adjustments to net assets

This is the total amount of regulatory adjustments applied on the fund's net assets specified in LPS 112.Regulatory adjustments to net assets is calculated as the sum of:holdings of own Tier 1 Capital instruments;excess of deferred tax assets over deferred tax liabilities;fair value gains and losses from changes in own creditworthiness;goodwill and other intangible assets;surplus in defined benefit superannuation funds;deficit in defined benefit superannuation funds;reinsurance assets not subjected to an executed and legally binding contract;regulatory capital requirement of investments in subsidiary, JV and associate;assets under a fixed or floating charge;liability adjustments;fair value adjustments;adjustments to net assets of the fund due to shortfall in Tier 2 capital;other net asset adjustments; andseed capital receivable from approved benefit fund.

Regulatory capital requirement of investments in subsidiaries, JVs and associates

This is the deduction for regulatory capital requirement for investments in subsidiaries, joint ventures and associates as detailed in LPS 112.

Reinsurance assets not subjected to an executed and legally binding contract

This is the value of reinsurance assets (if positive) related to each reinsurance arrangement that, subject to a six-month grace period from risk inception, does not comprise an executed and legally binding contract.

Reinsurance premiums payable

This is the amount related to reinsurance premiums due but not yet paid which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17.Premiums should be gross of commissions, before profit share rebates, and inclusive of stamp duty, policy fees, loadings and discounts. This definition is consistent with the definition of premium defined in LRS 750.0. Life companies may use approximate methods to report this item if premiums which meet the outlined definition are not readily available (corresponding adjustments also need to be made in other accounts receivable or other accounts payable).Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item increases liability adjustments.

Reinsurance recoveries receivable

This is the amount related to reinsurance recoveries due but not yet received which has been recognised within insurance and reinsurance contract liabilities and assets reported on the balance sheet under AASB 17.Life companies must exclude any amount already allowed in adjusted policy liabilities to avoid double counting.This item reduces liability adjustments.

Reserves from equity-settled share-based payments

This is the value of reserves from equity-settled share-based payments granted to employees as part of their remuneration package that meets the requirements of LRS 112. This only includes reserves relating to issue of new shares.

Retained earnings

This is the retained earnings consistent with the reported amount in the balance sheet. For friendly societies, this item includes unallocated benefit fund reserves. Do not include the amount of undistributed current year earnings.

Tier 1 Capital	Tier 1 Capital is calculated as the sum of:Common Equity Tier 1 Capital; andAdditional Tier 1 Capital.
Tier 1 Capital ratio	Tier 1 Capital ratio is calculated as:Tier 1 Capital;divided by:prescribed capital amount.
Tier 2 Capital	Tier 2 Capital includes components of capital that, to varying degrees, fall short of the quality of Tier 1 Capital but nonetheless contribute to the overall strength of the fund and its capacity to absorb losses.Tier 2 Capital is calculated as the sum of:eligible Tier 2 Capital instruments issued by the fund;adjustments and exclusions to Tier 2 Capital;transitional Tier 2 Capital; andless:holdings of own Tier 2 Capital instruments.
Transitional Additional Tier 1 Capital	This is the amount of capital instrument that have been temporarily recognised and approved as Additional Tier 1 Capital for transitional purposes.
Transitional Tier 2 Capital	This is the amount of capital instrument that has been temporarily recognised and approved as Tier 2 Capital for transition purposes.