Financial Sector (Collection of Data) (reporting standard) determination No. 51 of 2008 ARS 393.0 Lease Finance (Cth)
Financial Sector (Collection of Data) (reporting standard) determination No. 51 of 2008
Reporting standard ARS 393.0 Lease Finance
Financial Sector (Collection of Data) Act 2001
I, Wayne Stephen Byres, a delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:
REVOKE Reporting Standard ARS 393.0 Lease Finance made by Financial Sector (Collection of Data) (reporting standard) determination No. 39 of 2006; and
DETERMINE Reporting Standard ARS 393.0 Lease Finance in the form set out in the Schedule, which applies to financial sector entities to the extent provided in paragraph 2 of the reporting standard.
Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on the later of 1 April 2008 and the date of registration of this instrument on the Federal Register of Legislative Instruments.
Dated 4th February 2008
[Signed]
Wayne Byres
Executive General Manager
Diversified Institutions Division
Interpretation
In this Determination
APRA means the Australian Prudential Regulation Authority.
Federal Register of Legislative Instruments means the register established under section 20 of the Legislative Instruments Act 2003.
Schedule
Reporting Standard ARS 393.0 Lease Finance comprises the 64 pages commencing on the following page.
Reporting Standard ARS 393.0
Lease Finance
Objective of this reporting standard
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 and outlines the overall requirements for the provision of information to APRA relating to an authorised deposit-taking institution’s lease finance. It should be read in conjunction with:
Form ARF 393.0.1 Lease Finance in NSW;
Form ARF 393.0.2 Lease Finance in VIC;
Form ARF 393.0.3 Lease Finance in QLD;
Form ARF 393.0.4 Lease Finance in SA;
Form ARF 393.0.5 Lease Finance in WA;
Form ARF 393.0.6 Lease Finance in TAS;
Form ARF 393.0.7 Lease Finance in the NT; and
Form ARF 393.0.8 Lease Finance in the ACT,
and the associated instructions (all of which are attached and form part of this reporting standard).
Purpose
Data collected in Forms ARF 393.0.1 to 393.0.8 is used by APRA for the purpose of prudential supervision. It may also be used by the Reserve Bank of Australia and the Australian Bureau of Statistics.
Application
This reporting standard applies to an authorised deposit-taking institution (ADI) as set out in the table below.
Class of ADI Applicable Australian-owned Bank Yes Foreign Subsidiary Bank Yes Branch of a Foreign Bank Yes Building Society Yes Credit Union Yes Specialist Credit Card Institution (SCCI) No Other ADI[1] Yes [1] Only those other ADIs that are not locally incorporated are required to comply with this reporting standard.
Information required
An ADI that is an Australian-owned bank, a foreign subsidiary bank or a branch of a foreign bank must complete each of Forms ARF 393.0.1 to 393.0.8 on a domestic books basis for each reporting period.
An ADI that is a building society, a credit union or Cairns Penny Savings & Loans Limited must complete each of Forms ARF 393.0.1 to 393.0.8 on a licensed ADI basis for each reporting period.
Form and method of submission
The information required by this reporting standard must be given to APRA in electronic form, using one of the electronic submission mechanisms provided by the ‘Direct to APRA’ (also known as ‘D2A’) application.
Note: the Direct to APRA application software may be obtained from APRA.
Reporting periods and due dates
Subject to paragraph 7, an ADI to which this reporting standard applies must provide the information required by this reporting standard for each calendar month.
APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular ADI, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to:
(a)the particular circumstances of the ADI;
(b)the extent to which the information is required for the purposes of the prudential supervision of the ADI; and
(c)the requirements of the Reserve Bank of Australia or the Australian Bureau of Statistics.
The information required by this reporting standard must be provided to APRA by 10 business days after the end of the reporting period to which it relates.
APRA may grant an ADI an extension of a due date in writing in which case the new due date for the provision of the information will be the date on the notice of extension.
Authorisation
If an ADI submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the ADI to digitally sign, authorise and encrypt the relevant data. For this purpose, APRA’s certificate authority will issue ‘digital certificates’, for use with the software, to officers of the ADI who have authority from the ADI to transmit the data to APRA.
Minor alterations to forms and instructions
APRA may make minor variations to:
(a)a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b)the instructions to a form, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify in writing each ADI that is required to report under this reporting standard.
Transitional
An ADI must report under the old reporting standard in respect of a transitional reporting period. For these purposes:
old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).
transitional reporting period means a reporting period under the old reporting standard:
(a)which ended before the date of revocation of the old reporting standard; and
(b)in relation to which the ADI was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.
Note: for the avoidance of doubt, if an ADI was required to report under an old reporting standard, and the reporting documents were due before the date of revocation of the old reporting standard, the ADI is still required to provide the overdue reporting documents in accordance with the old reporting standard.
Interpretation
In this reporting standard:
ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.
APRA means the Australian Prudential Regulation Authority established under the Australian Prudential Regulation Authority Act 1998.
Australian-owned bank means a locally incorporated ADI that assumes or uses the word ‘bank’ in relation to its banking business and is not a foreign subsidiary bank.
branch of a foreign bank means a ‘foreign ADI’ as defined in section 5 of the Banking Act 1959, but does not include a SCCI that is a foreign ADI.
building society means a locally incorporated ADI that assumes or uses the expression ‘building society’ in relation to its banking business.
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.
class of ADI means each of the following:
(i)Australian-owned bank;
(ii)foreign subsidiary bank;
(iii)branch of a foreign bank;
(iv)building society;
(v)credit union;
(vi)other ADI; and
(vii)specialist credit card institution.
credit union means a locally incorporated ADI that assumes or uses the expression ‘credit union’ in relation to its banking business and includes Cairns Penny Savings & Loans Limited.
due date means the relevant due date under paragraph 8 or, if applicable, paragraph 9.
foreign subsidiary bank means a locally incorporated ADI in which a bank that is not locally incorporated has a stake of more than 15 per cent.
locally incorporated means incorporated in Australia or in a State or Territory of Australia, by or under a Commonwealth, State or territory law.
other ADI means an ADI that is not an Australian-owned bank, a branch of a foreign bank, a building society, a credit union, a foreign subsidiary bank or a specialist credit card institution but does not include Cairns Penny Savings & Loans Limited.
reporting period means a period mentioned in paragraph 6 or, if applicable, paragraph 7.
specialist credit card institution means an ADI that is subject to a condition on its authority under section 9 of the Banking Act 1959 confining the banking business that the ADI is authorised to carry on to the activities of credit card acquiring and credit card issuing in any credit card scheme that was designated as a payment system under section 11 of the Payment Systems (Regulation) Act 1998 on 11 April 2001
stake means a stake determined under the Financial Sector (Shareholdings) Act 1998, as if the only associates that were taken into account under paragraph (b) of subclause 10(1) of the Schedule to that Act were those set out in paragraphs (h), (j) and (l) of subclause 4(1).
Reporting Form ARF 393.0
Lease Finance
Instruction Guide
The purpose of this survey is to provide monthly statistics on the provision of lease finance to private and public enterprises and individuals. The statistics are used by the APRA for regulatory purposes, and may be provided to the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS) for policy and statistical purposes. Published aggregate statistics from this collection are used for research and policy formulation by economists, State and Federal Governments, and leasing associations.
A separate form for lease finance in all eight states should be completed:
ARF 393.0.1 Lease Finance in NSW;
ARF 393.0.2 Lease Finance in VIC;
ARF 393.0.3 Lease Finance in QLD;
ARF 393.0.4 Lease Finance in SA;
ARF 393.0.5 Lease Finance in WA;
ARF 393.0.6 Lease Finance in TAS;
ARF 393.0.7 Lease Finance in NT; and
ARF 393.0.8 Lease Finance in ACT.
General directions and notes
Reporting entity
This form is to be completed by Australian-owned banks, foreign subsidiary banks and branches of foreign banks on a Domestic books basis.
The Domestic books of the Australian-owned banks, foreign subsidiary banks and branches of foreign banks relates to the Australian books of the Australian authorised deposit taking institution (ADI) and has the following scope:
is an unconsolidated report of the Australian licensed ADI's operations/ transactions that are booked inside Australia;
exclude offshore branches of the Australian licensed ADI from this reporting unit;
exclude offshore banking units based overseas from this reporting unit;
do not consolidate Australian and offshore controlled entities or associated entities that are not ADIs;
include Australian based offshore banking units of the licensed ADI; and
include transactions with non-residents recorded on Australian books.
This form should be completed by all Credit Unions, Cairns Penny Savings & Loans Limited and Building Societies on a licensed ADI basis.
Licensed ADI
This refers to the operations of the reporting ADI on a stand-alone basis.
Securitisation deconsolidation principle
Except as otherwise specified in these instructions, the following applies:
Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that meets APRA’s operational requirements for regulatory capital relief under Prudential Standard APS 120 Securitisation (APS 120):
(a)special purpose vehicles (SPVs) holding securitised assets may be treated as non-consolidated independent third parties for regulatory reporting purposes, irrespective of whether the SPVs (or their assets) are consolidated for accounting purposes;
(b)the assets, liabilities, revenues and expenses of the relevant SPVs may be excluded from the ADI’s reported amounts in APRA’s regulatory reporting returns; and
(c)the underlying exposures (i.e. the pool) under such a securitisation may be excluded from the calculation of the ADI’s regulatory capital (refer to APS 120). However, the ADI must still hold regulatory capital for the securitisation exposures[2] that it retains or acquires and such exposures are to be reported in Form ARF 120.0 Standardised – Securitisation or Forms ARF 120.1A to ARF 120.1C IRB – Securitisation (as appropriate). The RWA relating to such securitisation exposures must also be reported in Form ARF 110.0 Capital Adequacy (ARF 110.0).
[2] Securitisation exposures are defined in accordance with APS 120.
Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that does not meet APRA’s operational requirements for regulatory capital relief under APS 120, or the ADI elects to treat the securitised assets as on-balance sheet assets under Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk or Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk, such exposures are to be reported as on-balance sheet assets in APRA’s regulatory reporting returns. In addition, these exposures must also be reported as a part of the ADI’s total securitised assets within Form ARF 120.2 Securitisation – Supplementary Items.
Reporting period
The information provided in this form should be for the calendar month up to and including the last day of the reporting month. All ADIs should submit the completed form to APRA within 10 business days after the end of the relevant reporting month.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).
The general requirements of AASB 121 for translation are:
foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[3]
[3]Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. Spot rate means the exchange rate for immediate delivery.
foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction;[4]
[4]Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.
foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss; and
translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
Translation of financial reports should otherwise follow the requirements in AASB 121.
Basis of preparation
Unless otherwise specifically stated, information reported on this form should comply with Australian accounting standards.
Definitions
A separate form for lease finance in all eight states should be completed. Where the entity has no activity in any state, check the “nil form” box. The form requests details of new commitments to provide lease finance to private and public enterprises. Only the Australian activities of the business should be included on the form. If exact figures are not available please provide careful estimates. Please note that the items listed under ‘Include’ and ‘Exclude’ are examples and should not be taken as a complete list of items to be included or excluded.
What is a “commitment”?
A commitment is a firm offer to provide finance which has been accepted by the client. A commitment generally exists once the loan application has been approved, and a loan contract or letter of offer has been issued to the borrower.
Include:
commitments to related corporations except to those related corporations within the same Financial Sector (Collection of Data) Act 2001 category or Australian and New Zealand Standard Industrial Classification (ANZSIC) class; and
new commitments which have also been cancelled during the month.
Exclude:
commitments to non-residents;
commitments for commercial hire purchase agreements (these should be reported on ARF 391.0 Commercial Finance (ARF 391.0));
commitments for debt participation in leveraged lease agreements (these should be reported on ARF 391.0);
commitments for leasing of land and buildings; and
commitments for leveraged leases which are finance leases where the lessor provides a portion of the finance, with the major portion usually provided by long-term creditors and where the creditors’ recourse to the lessor is restricted to the proceeds from disposal of the leased asset and any unremitted lease payments.
How to consolidate
For corporations registered under the Financial Sector (Collection of Data) Act 2001, report consolidated figures for all related corporations within the same Registered Financial Corporation category.
For other corporations, report consolidated figures for all related corporations within the same ANZSIC class.
Valuation
Use one of the following valuation methods:
the capital cost of new goods;
the written-down value of goods re-leased;
the purchase price of second-hand goods;
in the case of finance leases, where the full value of the goods under lease is not financed by one corporation (e.g. partnership and syndicated leases), the value is your share of the full value, not equity participation; or
in the case of revolving lease facilities, such as master leases, report the value of goods acquired at each drawdown against such facilities. Do not report the value of commitments to provide a leasing limit or to increase a leasing limit.
Specific instructions
Part A: Value of goods financed under new lease commitments
This section asks for details of the value and type of the goods financed, or for which commitments to finance have been made, under both operating and finance lease (excluding leveraged leases) arrangements during the month.
Definitions
A finance lease refers to the leasing or hiring of tangible assets under an agreement (other than a hire purchase agreement) which transfers from the lessor to the lessee substantially all the risks and benefits incident to ownership of the assets, without transferring the legal ownership.
An operating lease is a lease under which the lessor effectively retains substantially all the risks and benefits incident to ownership of the leased asset. For the purpose of this survey only include details of operating leases of terms of one year or more.
Cars, station wagons and small passenger vehicles
The depreciation limit is the maximum amount which can be depreciated for taxation purposes. This limit is revised periodically. As at 6 June 2001, the Australian Taxation Office advised the limit was $55,134.
Include:
cars, station wagons, 4WD and forward control passenger vehicles/vans.
Exclude:
utilities and panel vans (include in Question 2);
buses (include in Question 6); and
special vehicles and motor cycles/scooters (include in Question 6).
Light trucks
Include:
vehicles constructed primarily for the carriage of goods and not exceeding 3.5 tonnes gross vehicles mass, such as utilities, panels vans, light trucks, station wagons, 4WD vehicles and forward control vans used to carry goods.
Exclude:
tow trucks (include in Question 6); and
tractors, self-propelled mowers, plant and equipment (include in Questions 8-10, as applicable).
Heavy trucks
Include:
all vehicles with a gross combination mass rating in excess of 3.5 tonnes (this includes prime movers registered without trailers).
Exclude:
passenger carrying trailer combinations and non-freight carrying vehicles (include in Question 6).
Trailers, buses/coaches and other motor vehicles
Include:
trailers (tray and table top trailers, semi-trailers designed to connect to a prime mover, animal carriers, trailed machinery, etc.);
buses and coaches;
special vehicles (ambulances, hearses, tow trucks, fire engines, etc.);
motor cycles/scooters;
caravans (motorised and non motorised); and
other non-freight carrying vehicles (mobile libraries, kitchens, workshops, etc.).
Exclude:
fork lifts (include in Question 7 (iv)).
Construction and earth moving equipment
Include:
crawler tractors, dumpers, road rollers, earth packers, scarifiers, rippers, concrete mixers, dozers, graders, mobile cranes, concrete pumpers, etc.
Manufacturing equipment
Include:
all plant and equipment used in the manufacture of goods.
Exclude:
all motor vehicles (include in Questions 1 to 6); and
fork lifts (include in Question 7 (iv)).
Agricultural machinery and equipment
Include:
tractors, tillage implements, seeding, planting and fertilising equipment, agricultural mowers, harvesters, and other agricultural machinery and equipment.
Exclude:
crawler tractors (include in Question 8).
Electronic data processing equipment
Include:
computers, computer peripherals, data entry systems and printers.
Office machines
Include:
telephone systems (including computerised PABX equipment);
accounting and adding machines, calculators and cash registers (programmable and multifunctional); and
duplicating and photocopying machines and dictaphones.
Other
Include:
gambling machines; and
medical equipment.
Part B: Value of goods by industry of lessee
Industry is the business the client is mainly engaged in. The industry groupings are according to the ANZSIC.
Include:
businesses that provide related or supporting services.
Agriculture, forestry and fishing
Include:
lessees engaged in providing related services such as sheep shearing, aerial agricultural services, harvesting or forest protection.
Mining
Include:
lessees engaged in mineral exploration, in the provision of services to mining or mineral exploration, and mining enterprises under development.
Manufacturing
Include:
lessees engaged in manufacturing products, where ‘manufacturing is related to the physical or chemical transformation of materials or components into new products’.
Construction
Include:
lessees engaged in special trade construction such as plumbing, earthmoving and dredging, painting, etc.
Wholesale trade
Include:
lessees engaged in the resale of new or used goods to businesses or to institutional (including Government) users.
Retail trade
Include:
lessees engaged in the resale of goods to final consumers for personal or household consumption; and
lessees engaged in reselling their own goods by auction.
Transport and storage
Include:
lessees engaged in providing terminal and storage facilities; and
lessees engaged in services related to transport, booking, travel, forwarding, materials handling, etc.
Finance and insurance
Include:
lessees engaged in the provision of finance, investments in financial assets and in providing services to lenders, borrowers and investors; and
lessees engaged in the provision of insurance and superannuation, and in providing services to insurances.
Property and business services
Include:
lessees engaged in valuing, purchasing, selling, renting, leasing or managing real estate;
lessees engaged in developing or subdividing land;
lessees engaged in scientific research and meteorological service;
lessees engaged in providing technical, legal, accounting and other business services; and
lessees engaged in renting and hiring equipment (except cars, trucks and other transport equipment).
Cultural, recreational, personal and other services
Include:
lessees engaged in providing entertainment, recreational, library, museum, accommodation and catering services;
lessees engaged in providing personal services such as laundries, hairdressing, photography and funerals;
private households employing staff; and
lessees engaged in public order and safety services (such as police, prison and fire-brigade).
Government administration and defence
Include:
lessees engaged in Federal, State and Local government enterprises that undertake public administration and regulatory activities;
judicial authorities and commissions; and
Army, Navy and Air Force defence establishments.
Health and community services
Include:
lessees engaged in providing health, welfare and employment services; and
certain non-profit organisations such as religious organisations, and business, professional and labour organisations, political parties and associations formed to promote community or sectional aims.
Other industries
Include:
lessees not elsewhere classified, such as those involved in the production or distribution of gas or electricity, the storage or supply of water, and the provision of education and communication services.
Total
The Total equals the sum of questions 17 to 29. The total of Question 30 should equal Question 15.
Part C: Comments
Please provide comments
on any of the information you have supplied on this form;
on any questions which caused problems; and
if you would like to suggest improvements to this form.
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