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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
Recourse receivables - recourse claims and assets
acquired in the course of settlement of damages
The Group may deal with the selling of items damaged
in insurance cases which are acquired in the course
of resolving damage cases. The net recoverable value
of damaged items in damage cases which the Group
manages to sell is recognised as revenue on the
transaction date (sale of the damaged item).
Exercised recourse receivables are recorded
separately as receivables insured by mortgage and
other recourse receivables, which is the basis for
impairment calculation. The Group makes impairment
of exercised recourse receivables and receivables on
redemption based an individual estimation of the
financial situation and liquidity of the insurance policy
holder. Liquidity of debtors and other receivables,
With the payment of damages, the rights in relation to
those responsible for the damage are also transferred
from the policy holder to the Group (subrogation). The
Group exercises that right through a recourse claim,
or partial payment of the insurance amount. In the
event that the insured person of compulsory liability
insurance loses his or her rights (intoxication etc.) the
Group demands recourse from the policy holder or
the person responsible for the damage for the entire
or partial portion of the paid damages. Exercised
recourse claims are recognised as insurance revenue.
Expected recourse amounts are also included in the
calculation of damage liabilities.
Recourse receivables are recorded separately, as
exercised and unexercised, whereas unexercised
recourse receivables are kept in off-balance-sheet
records and no impairment are formed with regard
to them.
except deferred tax receivables are assessed
individually and likewise for impairment calculation.
Loans
The Group approves loans to its subsidiaries and
associates in order to take advantage of synergy. The
Group can get loans under advantageous conditions
compared with subsidiaries and associates because
of its financial power and intensive cooperation with
financial institutions. It uses the interest rate for
interest on loans according to related parties. Loans
are not insured.
In some cases loans are also approved to companies
outside the Group if exists mutual interest for
business cooperation. Loans are not insured and the
interest rate is higher.
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