A N N U A L R E P O R T G R U P O S E C U R I T Y ... - Banco Security

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i) Trade accounts receivable. Trade accounts receivable correspond mainly to accrual of commissions on policies brokered to the
different insurance companies of indirect subsidiary Corredora de Seguros Security Ltda. Likewise, they includes factoring placements,
which are presented at nominal value net of the unanticipated value amount and the unaccrued price difference.
j) Factoring placements. Factoring placements are presented at the acquisition value of the invoices and documents, which is
their nominal value net of the unanticipated value amount and the unaccrued price difference and are presented in Trade accounts
receivable.
k) Recognition of price difference. The price difference generated in the acquisition of invoices and notes by direct subsidiary Factoring
Security S.A. is recognized as income on an accrual basis in function of the expiry of the acquired notes.
l) Provision for risky assets. As of each year-end the Company and its subsidiaries have established a provision to cover the risks of loss
of assets whose recovery is doubtful, which has been determined on the basis of a risk analysis performed by management (Note 5).
m) Inventory. Corresponds to apartments, parking spots and warehouses of the buildings of direct subsidiary Inmobiliaria Security S.A.,
which to date are fully completed and available for sale, valued at their price-level restated construction cost. Values thus determined
do not exceed their net realization values.
n) Investments with sellback agreements. Purchases of financial instruments with sellback agreements are valued at the purchase
value plus interest accrued, according to the implicit interest rate determined between the purchase value and the committed sales value
as of the commitment date, and are presented in Other current assets.
o) Fixed assets. Fixed assets items are presented at their price-level restated acquisition value net of depreciation.
p) Depreciation of fixed assets. Depreciation for the year has been calculated using the straight-line method based on the estimated
useful lives of the assets.
q) Leased fixed assets. Leased personal property and real estate that fulfill the characteristics of a financial lease are accounted for as
purchase of fixed assets recognizing the total obligation and interest on an accrual basis. Those assets are not legally the property of the
Company and its subsidiaries; therefore until the purchase option is exercised they cannot be freely disposed of.
r) Other assets. Goodwill on the placement of debt instruments (bonds) is price-level restated and amortized using the straight-line
method over the term of expiration of each of the lines of debt instruments issued. Goodwill on the placement of securitization debt
instruments of a separate shareholders’ equity is presented price-level restated and is amortized using the straight-line method over the
term of the debt instrument issued.