Report of Assets and Liabilities of a Non-U.S. Branch That Is Managed or Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank

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Draft Revisions to the Instructions to the
Report of Assets and Liabilities of a NonU.S. Branch That is Managed or Controlled
by a U.S. Branch or Agency of a Foreign
(Non-U.S.) Bank (FFIEC 002S) for the
Proposed Credit Loss Accounting Revisions
Proposed to Take Effect March 31, 2019
These draft instructions, which are subject to change, reflect the proposed
revisions to the FFIEC 002SŝŶƐƚƌƵĐƚŝŽŶƐ that would take effect March 31,
2019, as described in the federal banking agencies’ final Paperwork
Reduction Act Federal Register notice for this proposal that was published
on February 14, 2019.

Draft as of February 15, 2019

Draft Revisions to the Instructions to the FFIEC 002S
Proposed to Take Effect March 31, 2019

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Contents

Impacted Schedules

Page

General Instructions

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Item Instructions, Item 2(c)

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General Instructions
or, for institutions that have adopted ASU 2016-13,
allowances for credit losses.
(3) Overdrafts, federal funds and repurchase and resale
agreements.
(4) Claims resulting from clearing activities, foreign
exchange transactions, bankers acceptance transactions, and other activities.

Negative Entries
Negative entries are not permitted for any item.
Total Assets Must Equal Total Liabilities

Report Date

General Definitions

Reports are to be prepared as of the close of business on
the last calendar day of the quarter (March, June, September, and December).

Related and Nonrelated Institutions

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(7) Any other transactions or entries resulting in claims
between the reporting foreign branch and its head
office and other related institutions.

In order to report on this form, exchange rates are used to
convert non-U.S. currency values into equivalent U.S.
dollar values. Changes in those exchange rates may
create unrealized gains or unrealized losses. If such a
gain or loss is not reflected in, for example, an equity or
unremitted profit account on the foreign branch’s own
books, there will be a discrepancy between total assets
and total liabilities on this report unless an adjustment is
made. In such cases, the foreign branch’s liabilities to its
parent bank, which would be included in item 11(a),
should be increased to reflect unrealized gains and should
be reduced to reflect unrealized losses.

(5) Capital flows and contributions.

(6) Gross unremitted profits and any accounting or regulatory allocation entered on the books of the reporting foreign branch that ultimately affect unremitted
profits such as statutory or regulatory capital requirements, reserve accounts, and allowance for possible
loan losses.

How To Report
Accounting Basis

The report may be prepared on either an accrual or a cash
basis of accounting. The accounting basis used for an
individual foreign branch should be consistent from
quarter to quarter.

In certain line items, the Supplement distinguishes
between transactions of the reporting foreign branch with
related and nonrelated depository institutions. For
purposes of the Supplement, the definition of related
depository institution corresponds to that used for the
FFIEC 002 itself. Please refer to the entry for ‘‘Related
Institutions’’ in the Glossary section of the FFIEC 002
instructions and to the reporting instructions for Schedule
M of that report.
U.S. and Non-U.S. Addressees (Domicile)

Currency Translation

For some line items, the report distinguishes between
transactions denominated in U.S. dollars and transactions
denominated in other currencies. However, all items shall
be reported in U.S. dollars. Transactions or balances
denominated in currencies other than the U.S. dollar shall
be converted to U.S. dollar equivalents prior to their
incorporation in the report.

The Supplement also distinguishes between transactions
of the reporting foreign branch with U.S. addressees and
non-U.S. addressees.

Rounding

For related institutions (whether depository or nondepository), the definitions of U.S. and non-U.S. addressees (domicile) correspond to those used for Schedule M
of the FFIEC 002. That is, U.S. addressees encompasses
offices domiciled in the 50 states of the United States and
the District of Columbia. Non-U.S. addressees encompasses offices domiciled in a foreign country, in Puerto
Rico, or in a U.S. territory or possession. For additional
information, see the detailed instructions for preparation
of Schedule M.

See the entry for ‘‘Rounding’’ in the General Instructions
for preparation of the FFIEC 002.

For nonrelated parties, the definitions of U.S. and nonU.S. addressees correspond to those used in the FFIEC 002

If an asset or liability may be paid optionally in either
U.S. dollars or in another currency, report that transaction
as denominated in U.S. dollars.

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FFIEC 002S
General Instructions September 2008

March 2019

General Instructions
For institutions that have adopted ASU 2016-13, the allowance for loan
losses is the allowance for credit losses on loans and leases.
For purposes of this Supplement, such transactions shall
be included in item 2(d) below.

Commercial and industrial loans.

Report all commercial and industrial loans to U.S.
addressees, as defined for Schedule C, item 4(a), that are
denominated in U.S. dollars.
Item 2(c)(4)

All other loans.

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Item 2(b)(1) U.S. Treasury securities and U.S.
Government agency and corporation obligations.

Item 2(c)(3)

Report those securities as defined for Schedule RAL,
items 1(b)(1) and 1(b)(2), that are denominated in U.S.
dollars.
Item 2(b)(2)

All other securities.

Report all other bonds, notes, debentures, and corporate
stock (including securities of state and local governments
in the U.S.), as defined for Schedule RAL, items 1(c)(1)
and 1(c)(2), that are issued by U.S. addressees and
denominated in U.S. dollars.
Item 2(c)

Loans.

Report in the appropriate subitem below the aggregate
book value of all U.S. dollar-denominated loans (and
leases) to U.S. addressees (other than related depository
institutions), before deduction of any allowance for loan
losses (which is to be reported in item 4(a) or 11(a)) but
net of any specific reserves. Each subitem should be
reported net of (1) unearned income (to the extent
possible) and (2) deposits accumulated for the payment
of personal loans (hypothecated deposits). For additional
general information on loans, please refer to the general
instructions for FFIEC 002 Schedule C, Loans. References to specific line items in Schedule C are provided
for each subitem below.
Item 2(c)(1)

Loans secured by real estate.

Report all loans secured by real estate, as defined for
Schedule C, item 1, that are made to U.S. addressees
(other than related depository institutions) and denominated in U.S. dollars. (Also see the Glossary entry in the
FFIEC 002 instructions for ‘‘Loans Secured by Real
Estate.’’)
Item 2(c)(2) Loans to nonrelated depository
institutions in the U.S.

Report all loans to nonrelated depository institutions
in the U.S., as defined for Schedule C, items 2(a)(1),
2(a)(2), and 2(b), that are denominated in U.S. dollars.
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Report all other loans to U.S. addressees (other than
related depository institutions) denominated in U.S. dollars that cannot properly be reported in one of the
preceding loan items, including such loans that are called
for in the following items on Schedule C of the FFIEC
002:
• Item 3, Loans to other financial institutions.
• Item 5(a), Acceptances of other U.S. banks.

• Item 7, Loans for purchasing or carrying securities
(secured and unsecured).
• Item 8, All other loans (including obligations other
than securities of state and local governments in the
U.S.; loans to individuals; and lease financing receivables (net of unearned income)).
Item 2(c)(5) Less: Any unearned income on loans
reflected in Items 2(c)(1)–2(c)(4) above.

As noted earlier, to the extent possible, the preferred
treatment is to report the specific loan categories net of
unearned income. A reporting institution should enter
here unearned income only to the extent that it is
included in (i.e., not deducted from) the various loan
items (items 2(c)(1) through 2(c)(4)) above. If a respondent reports each loan item above net of unearned
income, enter a zero or the word ‘‘none’’ for item 2(c)(5).
Item 2(c)(6)

Total loans, net of unearned income.

Report the sum of items 2(c)(1) through 2(c)(4) minus
item 2(c)(5).
Item 2(d)

Other claims.

Report any remaining U.S. dollar-denominated claims on
U.S. addressees (other than related depository institutions) that cannot properly be reported in items 2(a)
through 2(c) above, such as:
• Federal funds sold and securities purchased under
agreements to resell, as defined for Schedule RAL,
item 1(d), that are transacted with U.S. addressees and
denominated in U.S. dollars.
FFIEC 002S
General Instructions September 2008

March 2019