12.1 For the purpose of risk weighting equity exposures, as defined in Article 133(1) to (2) of the Credit Risk: Standardised Approach (CRR) Part, firms are required to measure the age of an undertaking from the date of its establishment, when determining whether an exposure is a higher risk equity exposure in accordance with its definition in the Glossary Part.

12.2 The PRA expects firms to take the date of incorporation for a body corporate or partnership, or the date of the business commencing for an unincorporated association, as the date of establishment of an undertaking, except in the following circumstances:

a) where firms observe that the undertaking has been dormant, through trading inactivity or otherwise, firms should take the date that trading activity first commenced or recommenced as appropriate as the date of establishment; and

b) where an undertaking is not trading, but is otherwise active, such as through the research and development of products, hiring of employees, or other forms of revenue generation, firms should take the date of the first of these events commencing as the date of establishment.