Regulatory Alerts1998-04-10
Instruction No. 98-05 of April 10, 1998, as amended, regarding the accounting treatment of prior assignments of private receivables and lease rental receivables eligible for refinancing by the Bank of France
The Banking Commission issued Instruction No. 98-05 to define the accounting treatment for credit institutions assigning private receivables and lease rental receivables as collateral to the Bank of France prior to refinancing. The instruction mandates that these assigned receivables be recorded in the 'Given Commitments' element of the SITUATION table and treated as repurchase operations, with specific rules for their removal from off-balance sheet items during mobilization and their reintegration upon refinancing maturity. The instruction entered into force upon the implementation of new Bank of France provisions regarding monetary market operations.
Official texts of the Banking Commission Instruction No. 98-05 of April 10, 1998 amended by Instruction No. 2009-02 of June 19, 2009 regarding the accounting treatment of prior assignments of private receivables and receivables representing rents from lease operations, eligible for refinancing by the Bank of France
Article 1 The global assignment to the Bank of France of rated receivables (Category 3), carried out by credit institutions as collateral and prior to any granting of refinancing, is recorded in the "Given Commitments" element of the SITUATION table, at the gross book value of the assigned receivables.
Article 2 The global assignment to the Bank of France of receivables representing rents from lease operations, carried out by credit institutions as collateral and prior to any granting of refinancing, is recorded in the "Given Commitments" element of the SITUATION table at the nominal amount of the assigned rents.
Article 3 The mobilization with the Bank of France, within the framework of refinancing operations, of the receivables listed in Articles 1 and 2 of this Instruction is accounted for as a repurchase operation. For the assignor, the mobilized receivables are deducted from the "Given Commitments" element of the off-balance sheet items for their gross book value in the case of rated receivables (Category 3) and for the nominal amount of the assigned rents in the case of receivables representing rents from lease operations. The amount of refinancing granted is recorded in the "Values Given in Repurchase" element on the liabilities side under cash operations and interbank operations, and counterbalances the "Central Banks and Postal Check Offices" element, which is included in the assets side of the SITUATION table.
Article 4 Upon the maturity of the refinancing operation, the previously mobilized receivables are reintegrated into the off-balance sheet items, in the "Given Commitments" element of the SITUATION table, at their gross book value in the case of rated receivables (Category 3) and at the nominal amount of the assigned rents in the case of receivables representing rents from lease operations.
Article 5 Repealed.
Article 6 This Instruction shall enter into force as of the date of implementation of the provisions introduced by a new Instruction of the Bank of France regarding operations on the monetary market, for the purposes of the collateral arrangements for private receivables.