1.   For the purposes of the back-testing referred to in Article 325bf(6) of Regulation (EU) No 575/2013, institutions shall calculate the hypothetical changes in the portfolio’s value by using the same techniques, including the same pricing methods, model parametrisations and market data, as those used in the end-of-day valuation process, without considering any fees and commissions.

2.   When calculating the hypothetical changes in the portfolio’s value, institutions shall reflect the changes in the value of the portfolio that are due to the passage of time in the same way they reflect such changes in the calculation of:

(a)	the expected shortfall risk measure referred to in Article 325ba(1), point (a), of Regulation (EU) No 575/2013;

(b)	the stress scenario risk measure referred to in Article 325bk of Regulation (EU) No 575/2013.

3.   When calculating hypothetical changes in a portfolio’s value, institutions shall include in that value all those adjustments that have been considered in the end-of-day valuation process referred to in paragraph 1 and that are market risk related, that are calculated on a daily basis and that are included in the institution’s risk-measurement model, with the exception of all of the following adjustments:

(a)	credit valuation adjustments reflecting the current market value of the credit risk of counterparties to the institution;

(b)	adjustments attributed to the institution’s own credit risk that have been excluded from own funds in accordance with Article 33(1), point (b) or (c), of Regulation (EU) No 575/2013;

(c)	additional valuation adjustments deducted from Common Equity Tier 1 capital in accordance with Article 34 of Regulation (EU) No 575/2013.

4.   Institutions shall calculate the changes in the value of the adjustments referred to in paragraph 3 on the basis of either of the following:

(a)	all those positions that are assigned to trading desks for which institutions calculate the own funds requirements for market risk in accordance with the alternative internal model approach set out in Part Three, Title IV, Chapter 1b of Regulation (EU) No 575/2013.

(b)	all positions subject to own funds requirements for market risk.