QA2018-65 - Definition T01.00

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Feb 01, 2024
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QA2018-65

Question


A public bank, in order to facilitate the funding of SMEs, grants loans to other entities which finance the SMEs and assume the credit risk. From an accounting perspective, these are classified as a deposit whereas contractually, they are articulated as a loan.


Response


The line classification should depend on the specific nature of the contract. In this case, the contract articulates it as a loan, which is different from a deposit in the report, which means it should not be reported as a deposit. It can however be secured by collateral or have other specific features determining the exact reporting line, e.g. r120 (secured liabilities).