Annual Report - VÚB banka

2.12 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.
2.13 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.
2.14 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 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 uncollectability is measured individually
for loans that are individually signifi cant. Impairment
and uncollectability for a group of similar
loans that are not individually identifi ed as impaired
is measured on a portfolio basis.
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The Bank writes off loss loans and advances when
borrowers are unable to fulfi ll their obligations to
the Bank 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.
2.15 Subsidiaries, associates and jointly controlled entities
Subsidiaries, associates and jointly controlled entities
are reported at cost less impairment losses.
The impairment loss is measured as the difference
between the carrying amount of the shares and the
present value of estimated future cash fl ows discounted
at the current market rate of return for a
similar fi nancial asset.
VUB, a bank of Intesa Sanpaolo group