2018 Registration document and annual fi nancial report - BNP PARIBAS296

5 RISKS AND CAPITAL ADEQUACY PILLAR 3

5

Capital management and capital adequacy

5.2 Capital management and capital adequacy

SCOPE OF APPLICATION

The prudential scope of application defined in Regulation (EU) No. 575/2013 on capital requirements is not the same as the accounting scope of consolidation whose composition concerns the application of IFRS as adopted by the European Union. The notes to the consolidated fi nancial statements cover the accounting consolidation scope.

The consolidation principles and the scope of consolidation in accordance with the accounting consolidation method used are described respectively in notes 1.b and 8.j to the consolidated fi nancial statements.

PRUDENTIAL SCOPE In accordance with banking regulation, BNP Paribas Group has defi ned a prudential scope to monitor capital ratios calculated on consolidated data. Its specifi cities are as follows:

■ insurance companies (primarily BNP Paribas Cardif and its subsidiaries) that are fully consolidated within the accounting scope are consolidated under the equity method in the prudential scope;

■ jointly controlled entities are consolidated under the equity method in the accounting scope and under the proportional consolidation method in the prudential scope.

The differences between the accounting and prudential scopes of consolidation are summarised in the table below.