Regulatory Alerts2015-09-30
Circular 5/2015 of the Bank of Spain on the Accounting Specifics of SAREB
The Bank of Spain issued Circular 5/2015 to establish the specific accounting rules for SAREB, ensuring alignment between its accounting practices and its mandate as an asset management company. The circular defines 'asset units' for impairment testing, mandates the use of mortgage value for real estate valuation with specific statistical or automated exceptions, and sets detailed criteria for valuing debt instruments based on debtor repayment capacity. These measures aim to maintain coherence with market price evolution and SAREB's business plan horizons while allowing for professional judgment within defined thresholds.
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