996 - Banca Antonveneta

investments are originally recognised at cost andwritten up or down to determine the relevantshare of profit or loss recorded by the jointlycontrolledcompany after the acquisition date andother changes in the shareholders’ equity of theinvestee. The portion of the investee’s results forthe year which concern the venturer isrecognised in the latter’s income statement,while other changes in the investee’sshareholders’ equity are recognised in theGroup’s shareholders’ equity. Dividends paid bythe jointly-controlled company reduce the valueof the equity investment. The goodwill of thejointly controlled company is included in the bookvalue of the equity investment and is notamortized. After applying the net equity method,the Group determines whether it is necessary torecognise other impairment concerning the netequity investment of the Group in the associate.Companies subject to significant influence.Equity investments in companies subject tosignificant influence are measured on the equitymethod. Under this method, equity investmentsare originally recognised at cost and written upor down to determine the relevant share ofprofit or loss recorded by the investee after theacquisition date, as well as other changes in thenet shareholders' equity of the investee. Theportion of the investee’s results for the yearwhich concern the venturer is recognised in thelatter’s income statement, while other changesin the investee’s shareholders’ equity arerecognised in the Group’s shareholders’ equity.Dividends paid by the investee reduce the valueof the equity investment. The goodwill of anassociate is included in the book value of theequity investment and is not amortized. Afterapplying the net equity method, the Groupdetermines whether it is necessary to recogniseother impairment concerning the net equityinvestment of the Group in the associate.SECTION 4 - Events occurred after thereference date of the Financial StatementsPlease refer to the special section within theDirectors’ Report.A.2 – PART RELATING TO THE PRINCIPALFINANCIAL STATEMENTS ITEMSFinancial assets held for tradingClassification criteriaThis category comprises debt and equity-basedsecurities and the positive fair value of derivativecontracts held for the purpose of generating shorttermincome and resulting from the change in theirprice. Derivative contracts embedded in complexfinancial instruments are included in this category,and are recognised separately when:the economic characteristics and risks of thederivative are not strictly correlated with theeconomic characteristics and risks of the primarycontract;a separate instrument with the same conditionsof the embedded derivative would constituteitself a derivative contract;the hybrid (combined) instrument is notrecorded under financial assets or liabilities heldfor trading, nor under those designated at fairvalue.Recognition and derecognition criteriaFinancial assets are first recognised on thesettlement date of debt and equity-based securitiesand on the subscription date for derivativecontracts.When first recognised, financial assets held fortrading are valued at cost (i.e. the instrument’s fairvalue), without taking into account transactionexpenses or income directly attributable to theinstrument itself.Financial assets are derecognised upon expiry ofcontractual rights on cash flows generated by theassets themselves or when the financial asset issold, thus substantially transferring all the relevantrisks and benefits.Valuation criteria and recognition of incomeAfter initial recognition, financial assets held fortrading are designated as at fair value and anychanges in fair value are recorded in the incomestatement.The fair value determination of financial instrumentsbeing classified in this portfolio is based on activemarket prices 1 , on the prices provided by marketSECTION 5 - Other aspectsThe Consolidated Financial Statements were auditedby the independent auditor Reconta Ernst & Young.1 A financial instrument is intended as listed on an active market ifthe listings, reflecting normal market transactions, are promptlyand regularly accessible through Stock Exchanges, Brokers,Dealers, Financial Industry Companies, Listing Companies orAuthorised Bodies and such prices represent effective and regularmarket transactions, which are carried out based on a normalreference period.63