Annual Report - VÚB banka

3. Summary of significant accounting policies (continued)
3.13 Offsetting financial instruments
Financial assets and fi nancial liabilities are offset
and the net amount reported in the balance sheet,
if, and only if, there is an intention to settle on a net
basis, or to realize the asset and settle the liability
simultaneously. This is not generally the case with
master netting agreements, and the related assets
and liabilities are presented gross in the balance
sheet.
3.14 Non-current assets held for sale
Non-current assets held for sale are assets where
the carrying amount will be recovered principally
through a sale transaction rather than through continuing
use.
Non-current assets comprise buildings, which are
available for immediate sale in their present condition
and their sale is considered to be highly probable.
Assets classifi ed as held for sale are measured at
the lower of their carrying amount and fair value
less costs to sell.
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3.15 Loans and advances to customers and impairment losses
Loans and advances are fi nancial assets with fi xed
or determinable payments and fi xed maturities that
are not quoted in an active market and are stated
at amortized cost less any impairment losses. All
loans and advances to customers are recognized
on the balance sheet when cash is advanced to
borrowers.
Loans and advances to customers are subject to
periodic impairment testing. An impairment loss for
a loan, or a group of similar loans, is established if
their carrying amount is greater than their estimated
recoverable amount. The recoverable amount is
the present value of expected future cash fl ows, including
amounts recoverable from guarantees and
collaterals, discounted based on the loan’s original
effective interest rate. The amount of the impairment
loss is included in the income statement.
Impairment and uncollectibility is measured and
recognized individually for loans that are individually
signifi cant. Impairment and uncollectibility for a
group of similar loans that are not individually identifi
ed as impaired is measured and recognized on a
portfolio basis.
The VUB Group writes off loss loans and advances
when borrowers are unable to fulfi ll their obligations
to the VUB Group and when relevant evidence has
been obtained from the appropriate court. Loans
and advances are written off against the reversal
of the related impairment losses. Any subsequent
recoveries are credited to the income statement on
receipt.
Annual Report 2007