The Tier 2 capital is the sum of the following items subtracted by the deduction items in accordance with the rules for calculation methods: (1) cumulative perpetual preferred stock and its capital stock premium; (2) cumulative perpetual subordinated debts; (3) convertible subordinated debts; (4) long-term subordinated debts; (5) non-perpetual preferred stock and its capital stock premium; (6) when first time applying International Financial Reporting Standards in real estate and using the fair value or the re-estimated value method as the deemed cost, the difference in amount between the deemed cost and the book value recognized in retained earnings; (7) the 45% of unrealized gains on changes in the fair value of investment properties using fair value method, as well as the 45% of unrealized gains on available-for-sale financial assets; (8) operational reserves and loan-loss provisions; and (9) the cumulative perpetual preferred stock and its capital stock premium, cumulative perpetual subordinated debts, convertible subordinated debts, long-term subordinated debts, and the non-perpetual preferred stock and its capital stock premiums, which are issued by banks subsidiaries, and are not directly or indirectly held by banks. [5]
The Tier 2 capital is the sum of the following items subtracted by the deduction items in accordance with the rules for calculation methods: (1) cumulative perpetual preferred stock and its capital stock premium; (2) cumulative perpetual subordinated debts; (3) convertible subordinated debts; (4) long-term subordinated debts; (5) non-perpetual preferred stock and its capital stock premium; (6) when first time applying International Financial Reporting Standards in real estate and using the fair value or the re-estimated value method as the deemed cost, the difference in amount between the deemed cost and the book value recognized in retained earnings; (7) the 45% of unrealized gains on changes in the fair value of investment properties using fair value method, as well as the 45% of unrealized gains on available-for-sale financial assets; (8) operational reserves and loan-loss provisions; and (9) the cumulative perpetual preferred stock and its capital stock premium, cumulative perpetual subordinated debts, convertible subordinated debts, long-term subordinated debts, and the non-perpetual preferred stock and its capital stock premiums, which are issued by banks subsidiaries, and are not directly or indirectly held by banks. [5]