Basis of preparationBasis of preparation

Basis of preparation

Unless otherwise specifically stated, institutions are to comply with Australian accounting standards regarding the measurement of asset, liability and equity items.

Specific instructions

This quarterly collection of statistics on lending to business covers:

• loans and bills outstanding classified into the following size tiers:
  • under $100,000;
  • $100,000 to less than $500,000;
  • $500,000 to less than $2 million; and
  • $2 million and over;
• within each size tier, loans and bills outstanding classified by interest rate (Sections A, B and C);
• within each size tier, loans and bills outstanding classified by industry of borrower (Section D);
• new credit approvals to business classified by size and by purpose (Section E); and
• fees charged on loans and bills outstanding to business customers (for which banks are required to attach a schedule of fees each quarter).

The totals of Sections A, B and C should sum to the totals shown in Section D.

Where a customer has more than one credit facility, each facility should be reported separately, by size and by interest rate. Similarly, where there is more than one parcel of bills issued under a particular facility (with different maturities and yields), each parcel should be reported separately, by size and by interest rate.

Sections A, B & C - Impaired loans (& bills)

In this form, report impaired loans - i.e. non-accrual and restructured loans - net of specific provisions in the lowest interest rate tier of Sections A, B and C, and as an addendum item as shown on the form.

Section A – Variable interest rate loans

Variable-rate loans include facilities where the interest rate may be changed at any time during the term of the loan. Typically they comprise:

• loans priced off banks' published business indicator loan rates such as overdrafts and fully drawn loans; and
• business "special offers" where the rate charged is initially fixed or capped for a limited period, but is later reset in terms of the published indicator rate.

The interest rate charged to the borrower (i.e. the indicator or reference rate plus a margin for credit risk) should be reported.

Section B – Fixed interest rate loans

Fixed-rate loans include facilities where the interest rate remains unchanged for the full term of the loan. The interest rate charged to the borrower (including a margin for credit risk) should be reported.