Basel III: Immediate Impact on Call Report and AOCI

By Chris Ayers, Senior Manager – Assurance Services

Marcum’s Financial Institution Services Group would like to remind all Institutions that are not advanced approaches institutions that the Accumulated Other Comprehensive Income(“AOCI”) opt-in/opt-out election must be completed on Part 1.B of Schedule RC-R of the March, 2015 Call Report.Under the changes brought about from Basel III, each institution must make a one-time election to opt-in or opt-out of including certain adjustments from their AOCI in their regulatory capital.  For most institutions, the driving factor for AOCI is the change in unrealized gains/(losses) from their investments available for sale, however, AOCI can also be impacted by cumulative foreign currency translation adjustments and pension liability adjustments.

For more information on this topic please contact a member of Marcum’s Financial Institutions Services Group or click on the following link for more information on regulatory capital rules:www.fdic.gov/regulations/capital