AI Summary of Article 64 Amortisation of Tier 2 instruments
The provisions regarding Tier 2 instruments with a residual maturity exceeding five years stipulate that the entire amount shall be recognised as Tier 2 items. During the last five years before maturity, the qualification of these instruments is subject to a specific calculation.
This calculation involves determining the carrying amount on the first day of the final five-year period, divided by the total number of days in that timeframe. This result is subsequently multiplied by the number of remaining days until the contractual maturity of the instruments, thereby establishing their qualification status as Tier 2 items.
Article 64 Amortisation of Tier 2 instruments
1. The full amount of Tier 2 instruments with a residual maturity of more than five years shall qualify as Tier 2 items.
2. The extent to which Tier 2 instruments qualify as Tier 2 items during the final five years of maturity of the instruments is calculated by multiplying the result derived from the calculation referred to in point (a) by the amount referred to in point (b) as follows:
(a) the carrying amount of the instruments on the first day of the final five-year period of their contractual maturity divided by the number of days in that period;
(b) the number of remaining days of contractual maturity of the instruments.