According to Article 81 CRR minority interests shall comprise the sum of Common Equity Tier I instruments, the share premium accounts related to those instruments, retained earnings and other reserves of a subsidiary. In the case where a subsidiary is located in a jurisdiction whose local currency is different from the parent undertaking’s currency, the Regulation does not specify how to translate Common Equity Tier I instruments, the share premium accounts related to those instruments, retained earnings and other reserves of the subsidiary into Euros. CRR only includes a general requirement to use the applicable accounting framework (CRR Article 4(77)).
In the case of a subsidiary whose currency is different from the parent undertaking’s currency, clarification is sought regarding how to translate into Euros the calculations needed for the minority interests’ calculation under Article 81 CRR. Given that CRR includes a general requirement to use the applicable accounting framework (CRR Article 4(77)), for entities that apply IFRS, in order to prepare the consolidated financial statements, the foreign subsidiary’s results and financial position in local currency shall be translated into the Group’s presentation currency (i.e. euro) using the procedures set in IAS 21.