Financial Sector (Collection of Data) (reporting standard) determination No. 71 of 2008 - GRS 150.0 (2008) - Asset Exposure Concentrations and Risk Charge
Reporting entityReporting entity
Start here
Get a plain-English read of Reporting entity
Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 71 of 2008 - GRS 150.0 (2008) - Asset Exposure Concentrations and Risk Charge.
Reporting entity
This form is to be completed by:
- Branch insurers of a foreign parent insurer (reference to licensed insurer in the form means total operations of the branch, excluding the parent operations). For Branch insurers ‘Adjusted net assets in Australia’ has been used in the calculation of the exposure threshold. ‘Adjusted net assets in Australia’ refer to total assets less assets that are excluded as ‘assets in Australia’ for the purpose of section 28 of the Insurance Act 1973.
- Authorised insurance entities, including mutual entities (reference to licensed insurer in the form means total operations of the licensed entity). For licensed entities, ‘Capital Base’ has been used in the calculation of the exposure threshold; and
- Authorised reinsurance entities (reference to licensed insurer in the form means total operations of the licensed entity). For licensed entities, ‘Capital Base’ has been used in the calculation of the exposure threshold.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’.
The general requirements of AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’ for translation are:
- Foreign currency monetary items[2] outstanding at the reporting date must be translated at the spot rate[3] at the reporting date.
- Foreign currency non-monetary items[4] that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction.
- Foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 ‘Financial Instruments: Recognition and Measurement’. However, those foreign currency derivatives that are not within the scope of AASB 139 ‘Financial Instruments: Recognition and Measurement’ (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121 ‘The Effects of Changes in Foreign Exchange Rates’.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.