Under Japan's capital adequacy notice, the amount that corresponds to exposure at default for derivatives is calculated as the "credit equivalent amount." It is calculated with SA-CCR (the standardized approach for counterparty credit risk) or with the internal model method (called the expected exposure method in the notice). Banks may use the latter with the approval of the Commissioner of the Financial Services Agency. Under the internal model method, effective EPE, a form of expected positive exposure, is multiplied by a regulatory factor.
Exposure at default is a single amount set by regulatory formulas. It is calculated differently from the percentile of the distribution used for credit limits and from the average at each date used for CVA.