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The company can decide to write-off a bad debt when the payment is deemed uncollectible. Let’s say a customer has signed an annual contract of $12,000 according to the revenue recognition principle, revenues are recognized at $1,000 per month. From a SaaS accounting perspective, the revenue can be recognized only when the said product/service obligations are satisfied.

The revenue recognition principle states that revenue is recognized in the accounting period in which the performance obligation is satisfied. Revenue recognition principle states that a firm should record revenue in its books of accounts when it is earned, realized, or realizable, and not when the cash is collected. https://online-accounting.net/ Revenue is earned when the company delivers its products or services. This means that the company has carried out its part of the deal. Revenues are realized when the cash is received for the goods/services sold. Revenues are realizable when the company receives an asset in exchange for the goods/services delivered.

• This accounting method recognizes the revenue once it is considered earned, unlike the alternative cash-basis accounting, which recognizes revenue at the time cash is received.
• Outside of these consequences, even if you want to raise money for your company in the future, Venture capitalists and investors are going to look for companies that are compliant.
• The revenue recognition principle serves as a solid guidepost.
• The customer includes an addon - Setup Fee, for the month of January, priced at $150, along with a metered-billing component priced at $300 per month.
• Revenue and expense recognition is critical for a business to maintain consistent financial statements.
• But how the revenue from that sale is recognized is very important, not just to the sales and finance teams, but to every employee and stakeholder in the company.

A good or service is capable of being distinct if the customer can benefit from it on its own or with other resources that are readily available. Brainyard delivers data-driven insights and expert advice to help businesses discover, interpret and act on emerging opportunities and trends.

Steps To Satisfy The Updated Revenue Recognition Principle

A current consumer decides to opt into the annual coffee subscription plan, meaning that they pay for 12 months of the service at a discounted upfront cost of $264 ($22/month). The coffee company cannot recognize that $264 upfront, as it has not delivered the service/product. Instead, the business will recognize the $22 each month after the consumer receives their coffee sampler. This codification handles revenue from contracts with customers. It provides a uniform framework organizations can follow for recognizing revenue from contracts. The previous guidance was industry-specific which created a number of fragmented policies.

Only as the transfer of value takes place is revenue recognized. The completion of production method allows recognizing revenues even if no sale was made. This applies to natural resources where there is a ready market for these products with reasonably assured prices, units are interchangeable, and selling and distributing costs are not significant. Accrual accounting allows some revenue recognition methods that recognize revenue prior to delivery or sale of goods. If a company cannot reasonably estimate the amount of future returns and/or has extremely high rates of returns on sales, they should recognize revenues only when the right of return expires. Those companies that can estimate the number of future returns and have a relatively small return rate can recognize revenues at the point of sale, but must deduct estimated future returns.

Why Is Expense Recognition Important For Companies?

Retained earnings will increase by revenues of $4,750 less expenses of $3,875, or $875. Debits of $18,250 and 3,475 equal credits of $14,550 and $7,175 so debits equal credits. The difference of nominal or temporary account debits and credits of a debit of $3,700 indicates growth in the company for the fiscal period – an increase in retained earnings. An adjusted trial balance proves the equality of the total debit balances and the total credit balances in the ledger after all adjustments are made. While the Interest Expense account is correct, the amount of interest is for a full year, not the five months of elapsed time. Prior to an accrual adjustment, the revenue account or the expense account is understated.

• Simply put, billings include money you are owed from your customer.
• Hence, both revenues and expenses should be able to be reasonably measured.
• Revenue recognition states that revenue is recorded when it is realized, or realizable and earned, as opposed to received.
• To provide general principles and guidelines for the proper accounting of West Virginia University’s operating and non-operating revenues.
• Revenue for various performance obligations may be recognized at a point in time or over a period of time and must satisfy Criteria 1 and 2 specified in the revenue recognition principle.
• The expense recognition principle is a fundamental principle of accounting.

Because tax periods often do not coincide with the ends of fiscal periods, taxes are routinely accrued. Best Buy Financial Analysis Paper However, there are exceptional cases where inventory could be reported above cost. Inventory with previous fixed monetary value, with no substantial cost of … Motomart Case Study Although the Motomart case is said to be based upon real data, I feel that it is inaccurate in providing useful information, as they used the NRV as the cost… Two possible scenarios that the customer can encounter, depending on how Help! A credit note will be issued, to adjust for the reduced number of agents and a prorated invoice will be generated.

The customer has the significant risks and rewards of ownership of the asset. We saved more than $1 million on our spend in the first year and just recently identified an opportunity to save about $10,000 every month on recurring expenses with PLANERGY. Regarding performance, it occurs when the seller has done what is to be expected to be entitled to payment. D Gourmet Cakes will prepare an adjusted trial balance, and Cindy’s Cupcakes will not.

Business

Revenues are realized when cash or claims to cash are received. Revenues are realizable when they are readily convertible to cash or claim to cash. The seller must have a reasonable expectation that he or she will be paid for the performance. D that have accumulated before the statement date but have not yet been paid. B Insurance Expense for $400 and a credit to Prepaid Insurance of $400.

In this article, we discuss Revenue Recognition under the accrual basis of IFRS. GoCardless is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number , for the provision of payment services. The transaction price must be clearly identified in the contract. As such most of the contracts have a fixed amount, but this is not mandatory. QuickBooks Online is the browser-based version of the popular desktop accounting application.

Asc 606 & Revenue Recognition In The World Of Saas

If there is a loan, the expense may include any fees and interest charges as part of the loan term. This disbursement continues even if the business spends the entire $20 million upfront. For example, a piece of specialized equipment may cost $25,000. It may last for ten or more years, so businesses can distribute the expense over ten years instead of a single year. It’s not every day that you’re sifting through tax and accounting services lingo (unless you’re a professional “nerd” like us). Revenue and expense recognition timing is critical to transparent financial presentation.

C Record Revenues that will be paid for in a subsequent period.

Public companies within the U.S. are required to follow GAAP standards. While private companies are not technically required to adhere to GAAP, they may find it necessary for financing and expansion opportunities. Revenue recognition has been a hot topic for the past several years in light of the release of Accounting Standards Codification 606 in 2014. This is the ultimate goal where the company organization recognizes revenue. Continuing with our SaaS example, revenue is realized at the end of every billing period. It may be monthly, quarterly, or annually, depending on the terms of the customer agreement. For instance, if a customer were to make an upfront payment before receiving delivery of the product, the revenue isn’t recognized until they receive the product.

Using this principle also helps you better account for revenue in the period that it’s earned, rather than the period in which it’s received. If you’re a sole proprietor operating on a cash basis, chances are that using the revenue recognition principle is not necessary. The last exception to the revenue recognition principle is companies that recognize revenue when the cash is actually received.

Expense Recognition Is An Important Part Of Accrual Accounting

Therefore, the revenue generation process has already occurred and is satisfied upon execution of the contract. Sally’s Furniture House sells a living room set to a customer in January. According to the contract terms, the customer agrees to pay for the set once Sally’s Furniture House delivers it to their home. With delivery backed up, Sally’s can’t deliver the furniture to the customer until several weeks later in late February. Sally’s can recognize the revenue in its accounting books in late February once the customer makes payment.

The tradeoff for the company receiving these benefits from the credit card company is that a fee is charged to use this service. The fee can be a flat figure per transaction, or it can be a percentage of the sales price.

Any services like construction or engineering use this method. These service providers have to be able to show they’re earning revenue despite the fact that their projects aren’t right finished. The revenue recognition principle is also known as the revenue recognition concept. Revenue from permission to use company’s assets (e.g. interest for using money, rent for using fixed assets, and royalties for using intangible assets) is recognized as time passes or as assets are used. Revenues from rendering services are recognized when services are completed and billed.

In a case like this, there are two classifications it could be categorized under. The ASC 606 could mean big changes for the way your business recognizes revenue, especially if you operate on a subscription model. It went into effect for publicly-traded companies in 2017 and went into effect for everyone else in January of 2019.

Best Practices In Revenue Recognition

Break down the price of each individual good or service you’re delivering. If you don’t have an exact price for each good or service, estimate it.

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BBVA closed today the sale to of 948 items of real state to “Tree Inversiones Inmobiliarias” a company managed by RREEF Limited, for an amount of 1.154 million euros. During the period set for that purpose, the holders of 8.99% of the free allotment rights have accepted BBVA’s undertaking to acquire such free allotment rights. Consequently, BBVA has acquired 433,637,066 rights for a total consideration of 43,363,706.60 Euros.

Standard & Poor’s Ratings Services (S&P) has today upgraded BBVA’s long-term rating (“Issuer Credit Rating – ICR”) to BBB from BBB-. Following the implementation of DBRS Rating European Covered Bonds methodology published on 17th December, 2014, DBRS Rating Limited has upgraded by one notch BBVA’s Mortgage Covered Bonds rating, from A to AA . Standard & Poor’s Ratings Services (S&P) has today upgraded BBVA’s long-term rating (“Issuer Credit Rating – ICR”) to BBB+ from BBB.

Financial reports

Following the publication of the updated “Global Banking Methodology” on May 24, 2017, DBRS Ratings Limited and DBRS, Inc. have concluded the review of certain subordinated debt ratings of several European banking groups started on January 13, 2017. BBVA informs that it has launched an offer of securities contingently convertible into ordinary shares of BBVA (the “Securities”) with the exclusion of the shareholders’ pre-emption right (the “Offer”). BBVA informs that it has launched an offer of securities contingently convertibleinto ordinary shares of BBVA (the “Securities”) with the exclusion of theshareholders’ pre-emption right (the “Offer”). BBVA has reached an agreement with the company “Neon Payments Limited” (the axiory forex broker “Company”) for the subscription of 492,692 preference shares of the Company (the “Shares”), representing approximately 21.7% of its share capital, through a share capital increase and in consideration of approximately USD 300 million (the “Subscription”). It has been decided to propose to the Board, in the next board meeting to be celebrated next December 22, the adoption of the decision to distribute the third gross interim dividend against 2009, which would be paid on December 28, 2009, amounting to 0,09 euros for each of all current issued shares. The board of directors of BBVA, at its meeting held today, May 4, 2011, has resolved to appoint the director Mr. José Maldonado Ramos as member of the Executive Committee.

BBVA has received a new communication from the Bank of Spain regarding its minimum requirement for own funds and eligible liabilities, as determined by the Single Resolution Board (“SRB”), that has been calculated taking into account the financial and supervisory information as of December 31, 2017. This communication supersedes the communication previously received and which was published as relevant information on May 23, 2018. As a result of the Supervisory Review and Evaluation Process carried out by the European Central Bank , BBVA has received a communication from the ECB that includes the requirement for BBVA to maintain, from January 1, 2020 on a consolidated basis, a CET1 capital ratio of 9.27% and a total capital ratio of 12.77%. The Board of Directors of BBVA has resolved to propose to the Annual General Meeting a cash payment in a gross amount of EUR 0.16 per share as final dividend for 2019 that will be paid on 9 April 2020, if approved.

BBVA has received on 26 October 2021 the required authorization from the European Central Bank for the buyback of up to 10% of its share capital for a maximum amount of 3,500 million euros, in one or several tranches and over a maximum period of 12 months as from the communication by BBVA that the buyback of shares has effectively commenced (the “Authorization”). The maximum amount of 3,500 million euros has been fully deducted from BBVA’s own funds as from the Authorization receipt. Following the inside information published on November 15, 2021 and March 31, 2022, with registration numbers at the Spanish Exchange Commission 1165, 1169 and 1381, respectively, in relation with the voluntary takeover bid (the “Voluntary Takeover Bid”) for the entire share capital of Türkiye Garanti BankasÄ� A.Ş. (“Garanti BBVA” or the “Company”) not already owned by BBVA, the Board of Directors of BBVA decided to increase the Voluntary Takeover Bid price offered in cash for each share1 of the Company from the initially announced price (12.20 Turkish Lira) to 15.00 Turkish Lira.

The bank entered the Brazilian market in 1957 and opened its first bank branch in 1980 in the country. In addition to its banking products, it offers insurance services and retirement plans. It is one of the world’s oldest banks and Brazil’s first financial institutions, having been founded in 1808.

BBVA communicates that it is carrying out a strategic review process of its nonlife insurance business in several geographies. Within this process, BBVA has received offers by several interested parties and is carrying out negotiations with the goal of eventually establishing bank-assurance alliances. The Board of Directors of BBVA has resolved to propose to the next Annual General Meeting a cash payment in a gross amount of EUR 0.059 per share against the share premium account that will be paid on 29 April 2021, if approved. BBVA has received a new communication from the Bank of Spain regarding top 5 most accurate intraday trading indicators its minimum requirement for own funds and eligible liabilities (“MREL”), as determined by the Single Resolution Board (“SRB”), that has been calculated taking into account the financial and supervisory information as of December 31, 2019 , and which supersedes the previous MREL communication published on November 19, 2019. This rating action is a consequence of the application of the latest changes in Moody’s methodology for banks, updated on July 9th, 2021. S&P Global Ratings (S&P) has upgraded by one notch BBVA’s long-term issuer credit rating to A from A- and shortterm ICR to A-1 from A-2.

BBVA y Sabadell confirman negociaciones para una eventual fusión

The region’s banking industry experienced a slowdown because of the COVID-19 pandemic and the ensuing slowdown. Latin America has one of the world’s fastest-growing banking sectors. BBVA notes the announcements made today by the European Banking Authority and competent National Supervisor regarding the capital exercise, which demonstrate the following result for BBVA… Voluntary conversion period at the option of said Convertible Bond holders. The minimum Conversion Price (initially €3.5) and the maximum Conversion Price (initially €50) of the BBVA shares for the purposes of converting the Convertible Bonds has been set at €3.44 and €49.19, respectively. The detailed results of the capital ratio stress test published today by the European Banking Authority are attached.

BBVA has decided to initiate strategic review of alternatives for its mandatory pension fund administrators business in Latin America. Despite this being a highly attractive business, its limited relationship with BBVA´s core business, the universal banking activity, advises the initiation of this process. Regarding the news published today, BBVA informs that it is in advanced discussions with MetLife, Inc. regarding a potential sale of BBVA’s stake in Administradora de Fondos de Pensiones Provida S.A. If BBVA reaches an agreement with MetLife, BBVA will announce it immediately. In order to facilitate the understanding of its underlying financial performance, starting in the fourth quarter of 2013, BBVA will reclassify the income statement as presented for informational purposes in its quarterly eport to isolate the impacts of the corporate transactions completed in the last two years. For such purposes, a new income statement line item called “Income from corporate transactions” will be created.

Since then, its focus shifted, expanding from financial services for coffee growers to the general public. The largest banks in Latin America are largely concentrated in four countries. We highlight some key information about each of these financial institutions, including total assets and a brief history. Rankings are based on total assets, according to an April 2022 report from S&P Global. In its meeting on 5th February 2009, has resolved to convene an Annual General Meeting of shareholders. Ángel Cano Fernández as Chief Operating Officer (”Consejero Delegado”), in substitution of D.

Today, the insurance company BBVA SEGUROS, S.A., DE SEGUROS Y REASEGUROS (“BBVA SEGUROS”), has entered into a 90% quota share reinsurance agreement with the reinsurance entity SCOR GLOBAL LIFE REINSURANCE IRELAND PLC (“SCOR GLOBAL LIFE”) for BBVA SEGUROS’ life insurance portfolio underwritten until 31 December 2012. By virtue of this agreement, BBVA SEGUROS will receive a reinsurance commission of approximately 630 million Euros. This transaction creates a gross extraordinary result for the BBVA Group of approximately the same amount. The Board of Directors of BBVA, in its meeting held today, has approved the appointment as member of the Executive Committee of the director Mrs. Susana Rodríguez Vidarte, who as of today ceases to form part of the Audit and Compliance Committee. Further to the relevant information disclosed by BBVA to the markets on February 1, 2013, and after the necessary approvals having been obtained, BBVA announces that it has completed the sale of the entirety of its approximately 64.3% interest in Chilean pension fund manager Administradora de Fondos de Pensiones Provida S.A.

The Board of Directors of BBVA, at its meeting held today, previous the Audit and Compliance Committee’s recommendation, and as a result of a tender process led by such Committee, has resolved to submit to the next BBVA’s ordinary general shareholders’ meeting the appointment of KPMG Auditores, S.L. As external auditor of BBVA and of its consolidated Group for the financial years 2017, 2018 y 2019. As announced in the relevant event dated 25 October 2013, BBVA’s shareholder remuneration policy establishes the distribution of an annual pay-out of between 35% and 40% of the profits obtained in each financial year and the progressive reduction of the remuneration via “Dividend Options”, so that the shareholders’ remuneration would ultimately be fully in cash. The Board of Directors of BBVA has approved an issuance of securities contingently convertible into ordinary shares of BBVA (the “Securities”) up to a maximum amount of 1,000 million euros, excluding the shareholders’ pre-emption right (the “Issuance”). By way of continuation from the relevant event filling dated 22nd June 2011 and pursuant to section 4.6.3 c).2 of the BBVA securities note (the “Securities Note”) regarding the issue of the mandatory convertible subordinate bonds with early conversion options in favour of the issuer (the “Convertible Bonds”), which was registered in the official records of the CNMV on 17….

The outlook has changed to negative from stable, mirroring now the negative outlook of Spain’s Sovereign S&P’s current rating. The Board of Directors of BBVA has resolved to propose to the Annual General Meeting a cash payment in a gross amount of EUR 0.23 per share against the voluntary reserves of BBVA that will be paid on 8 April 2022, if approved. BBVA has received a new communication from the Bank of Spain regarding prime xtb forex broker review the determination of its minimum requirement for own funds and eligible liabilities (“MREL”), as determined by the Single Resolution Board (“SRB”), that has been calculated taking into account the financial and supervisory information as of June 30, 2021 , and which repeals and supersedes the previous communication 1 published on May 31, 2021. By using this site, you are agreeing to security monitoring and auditing.

Shareholders held on March 16, 2012 and corresponding to the “Dividendo Opción” program, has ended on, April 30, 2012. BBVA has agreed to carry out an issue of contingent preferred securities convertible into newly issued ordinary shares of BBVA (the “Preferred Securities”), with exclusion of pre-emptive subscription rights for shareholders, for a total nominal amount of 500 million Euros (the “Issuance”). The holders of the remaining 91.01% of the free allotment rights have chosen to receive new BBVA ordinary shares. Thus, the definitive number of BBVA ordinary shares of 0.49 Euros of par value issued in the free-of-charge capital increase will be 78,413,506, and the amount of the capital increase will be 38,422,617.94 Euros. Attached please find a release informing of the result of the preferred securities exchange offer that was announced through a relevant event dated October 6, 2009.

Banco de Crédito e Inversiones

On February 23, 2010, Moody’s Investors Service revised the ratings of the hybrid securities issued by Spanish financial institutions. This is a consequence of the implementation of the new valuation methodology of this type of issues that was announced by the rating agency on January 12, 2010. The Board of Directors meeting of BBVA, 22nd June 2011, has resolved to convert the totality of the Mandatory Convertible Subordinate Bonds with early conversion options in favour of the issuer (the “Convertible Bonds”), issued by BBVA on 30th September 2009 for a nominal amount of TWO BILLION EUROS (€2,000,000,000). The conversion will be carried out on the forthcoming distribution payment date, ie, 15th July 2011, pursuant to the procedure established to such effect in the issue terms and conditions. The conversion will be mandatory for all Convertible Bond holders.

• In order to create a bancassurance partnership, for the purpose of developing the non-life insurance business in Spain, excluding the health insurance line.
• BBVA hereby communicates that the trading period for the free allotment rights of the free-of-charge capital increase adopted under Agenda item four section 4.1 by the Annual General Meeting of Banco Bilbao Vizcaya Argentaria, S.A.
• Appointed Mr. Eduardo Osuna Osuna member of the top management of BBVA with the position of Country Manager in Mexico, replacing Mr. Vicente María Rodero Rodero, who has assumed the position of Country Networks Manager of the BBVA group.

On May 31st, 2018, Moody’s Investor Service (Moody’s) has upgraded BBVA’s long-term senior unsecured debt rating to A3 from Baa1. BBVA has reached an agreement with Voyager Investing UK Limited Partnership, an entity managed by Canada Pension Plan Investment Board (“CPPIB”) for the transfer of a portfolio of credit rights which is mainly composed by non-performing and in default mortgage credits, with an aggregate outstanding balance amounting to approximately EUR 1,490 million (the “Transaction”). BBVA, pursuant to the Corporate Enterprises Act, sends the full text of the Notice of Meeting of BBVA’s Annual General Shareholders’ Meeting, to be held in Bilbao, at Palacio Euskalduna, foreseeably at second summons on 15 March 2019. The full texts of the proposed resolutions are enclosed herewith. In connection with the significant event published on 26 December 2018, BBVA informs that the sale of the great majority of the credits rights that composed the portfolio to Anfora Investing UK Limited Partnership, an entity belonging to Canada Pension Plan Investment Board, has taken place.

Analyst Ratings

Closing of the transaction has resulted in the sale of 80% of the share capital of the company Divarian Propiedad, S.A. BBVA’s Board of Directors, in its meeting held today, has approved the following resolutions, in execution of the succession plans for the Group Executive Chairman and for the Chief Executive Officer, approved by the Board of Directors in its meetings held on 26 September and 28 November 2018, respectively. BBVA has reached an agreement with Banco GNB Paraguay, S.A., an affiliate of Grupo Financiero Gilinski, for the sale of the entire stake that BBVA holds directly and indirectly in Banco Bilbao Vizcaya Argentaria Paraguay, S.A. The aggregate direct and indirect stake of BBVA in BBVA Paraguay represents 100% of its share capital.

Banco BBVA Argentina S.A.

Shareholders held on March 15, 2013 and corresponding to the “Dividendo Opción” program, has ended today, October 14, 2013. Further to the relevant facts dated March 14, 2014 and March 26, 2014, BBVA hereby communicates that the trading period for the free allocation rights of the free-of-charge capital increase adopted under Agenda item four section 4.1 by the Annual General Meeting of Banco Bilbao Vizcaya Argentaria, S.A. Shareholders held on March 14, 2014 and corresponding to the “Dividendo Opción” program, has ended today, April 14, 2014. Further to the relevant facts dated 12th September, 2014 and 24th September, 2014, BBVA hereby communicates that the trading period for the free allocation rights of the free-of-charge capital increase adopted under Agenda item four section 4.2 by the Annual General Meeting of Banco Bilbao Vizcaya Argentaria, S.A.

(“Garanti Bank”), therefore, BBVA´s total stake in Garanti Bank now amounts to 39.90%. BBVA notifies that its Board of Directors, at its meeting held today, March 31, 2016, has adopted a resolution, in a process of corporate reorganization of its banking subsidiaries in Spain, to commence the process for the integration of the companies belonging to the BBVA Group, Catalunya Banc, S.A., Banco Depositario BBVA, S.A. As of today, BBVA has received the required administrative authorisations to give full effect to the resolutions approved by the Board of Directors of BBVA in its meeting held on 20 December 2018. Further to the Relevant Event published on August 7, 2019, with registration number at the Spanish CNMV , BBVA informs that, as of today, after obtaining all required authorizations, BBVA has completed the sale to Banco GNB Paraguay, S.A., an affiliate of Grupo Gilinski, of its direct and indirect shareholding stake of 100% share capital in Banco Bilbao Vizcaya Argentaria Paraguay, S.A. Further to the Relevant Events published on November 16, 2020, with registration numbers at the Spanish CNMV 575 and 576, BBVA informs that, as of today, after obtaining all required authorizations, BBVA has completed the sale to The PNC Financial Services Group, Inc. of 100% of the capital stock of its subsidiary BBVA USA Bancshares, Inc., which in turn owns all the capital stock of the bank, BBVA USA. BBVA´s Board of Directors, at its meeting held on 30 June 2021, based on the Audit Committee’s recommendation, and as a result of a tender process carried out by such Committee, has resolved to select Ernst & Young, S.L.

As statutory auditor of BBVA and of its consolidated Group for the financial years 2022, 2023 and 2024. The Board of Directors will propose, when appropriate, its appointment to the next BBVA’s Ordinary General Shareholders’ Meeting. “BBVA International Preferred SA”, a subsidiary guaranteed at 100% by BBVA, has published an exchange offer in relation to 3 issues of preferred securities sold to institutional investors for a nominal amount of approximately 1,500 million euros. BBVA’s Board of Directors has resolved, at its meeting held on 1 February 2011, following the proposal of the Appointments Committee, to appoint by cooptation the shareholder Mr. José Luis Palao García-Suelto as director, who will be considered as independent director. BBVA has completed the acquisition of 24,8902% of the total issued share capital of Turkiye Garanti Bankasi, AS.

Banco do Brasil SA

BBVA hereby reports that on 30th June 2012 has taken place the mandatory partial conversion of the Subordinated Mandatory Convertible Bonds – December 2011 issued by BBVA (the “Convertible Bonds”) outstanding by reducing the 50% of its nominal value. Therefore, the nominal value of the Convertible Bond has been reduced from hundred Euros (€100) to fifty Euros (€50) as from that date. Consequently, 238,682,213 new ordinary BBVA shares have been issued, each with a nominal value of forty-nine euro-cents (€0.49), in order to attend the mandatory partial conversion of the Convertible Bonds. The listing of the new shares on the Madrid, Bilbao, Barcelona and Valencia securities exchanges over the SIBE exchange interconnection system is scheduled for 5th July 2012, such that their ordinary trading would start on 6th July 2012. Listing will be requested on the other non-Spanish securities exchanges where BBVA stock is traded.

As a result of the supervisory review and evaluation process carried out by the European Central Bank , BBVA has been communicated by the ECB its requirement to maintain a common equity tier 1 phased-in capital ratio of 9.5%, both on a consolidated and an individual basis. The judgment of the Court of Justice of the European Union regarding the preliminary rulings filed by some Spanish judges and courts about whether the time limitation for the refund of amounts in the so-called “cláusulas suelo” in loans with consumers, established by the Spanish Supreme Court in its Judgment dated May 9, 2013, among others, is compliant with Directive 93/13/EEC, has been published today. On July 25th, 2017 Scope Ratings has upgraded by one notch BBVA’s rating for existing senior unsecured debt from A to A+, with stable outlook. Regarding the news items published today, BBVA informs that is in talks with Cerberus Capital , which has expressed interest in acquiring the Real Estate business of the Bank in Spain.

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