BKLM377000 | Chargeable equity and liabilities: relevant foreign banks: attribution of chargeable equity and liabilities to a branch: determining 'A' the assets of the foreign bank (step 1)

Paragraph 25 of Schedule 19

The starting point for determining the assets of the foreign bank (or ‘A’) are the amounts that would have been recognised had accounts been prepared under IAS or for chargeable periods ending prior to 1 January 2021 UK GAAP.

If the foreign bank’s accounts are prepared under another GAAP then adjustments will be required to bring the amounts that are recognised in line with those that would have been recognised under IAS or for chargeable periods ending prior to 1 January 2021 UK GAAP.

Netting is permitted when determining the assets of the foreign bank. This netting follows the normal netting rules which are that certain liabilities can be netted against certain assets, where:

• the assets and liabilities are with the same counterparty, and

• there is a netting agreement in place which allows a single net settlement of the assets and liabilities, and

• the master netting agreement is legally effective and enforceable on insolvency of either party.

For the purposes of this step, the counterparty must either be a third party or a group member that is not within the bank levy charge.