GENERAL MEETING DRAFT - Bankier.pl

This method distributes the cost of benefits uniformly over the employee’s working life. Obligations are the
present value of average future benefits pro rata to the ratio of years of service to seniority at the time of
benefit payment.
The amount recognised as a liability in item 120(a) is the present value of the obligation at the Balance
Sheet Date, plus or minus any actuarial gains or losses not recognised in the Accounts under the
‘corridor’ method, which permits non-recognition of these when they do not exceed 10% of the present
value of the obligation and 10% of the fair value of any plan asset, less any pension charges relating to
benefits already provided but not recognised, less the fair value at the Balance Sheet Date of plan assets
due to settle the obligations directly.
The discount rate used to present-value obligations (whether financed or not) relating to benefits to be
provided after retirement varies according to the country where the liabilities are allocated and is
determined on the basis of market yield at the Balance Sheet Date of prime issuers’ bonds with an
average life in keeping with that of the relevant liability.
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Provisions for risks and charges are recognised when:
� The entity has a present obligation (legal or constructive) as a result of a past event;
� It is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation; and
� a reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no liability is recognised.
The amounts recognised as provisions are the best estimate of the expenditure required to settle the
present obligation. The risks and uncertainties that inevitably surround the relevant events and
circumstances are taken into account in reaching the best estimate of a provision.
Where the effect of the temporary value of money is material, the amount of a provision should be the
present value of the expenditure expected to be required to settle the obligation. The discount rate used is
a pre-tax rate that reflects current market assessments of the temporary value of money and the risks
specific to the liability.
Provisions are reviewed periodically and adjusted to reflect the current best estimate. If it becomes clear
that it is no longer probable that an outflow of resources embodying economic benefits will be required to
settle the obligation, the provision is reversed.
A provision is used only for expenditures for which the provision was originally recognised.
Allocations made in the year are recognised in profit and loss item 190 “Provisions for risks and charges”
and include increases due to the passage of time; they are also net of any re-attributions.
“Other provisions” also include obligations relating to benefits due to agents, specifically supplementary
customer portfolio payments, merit payments, contractual payments and payments under non-competition
agreements, which are measured as per defined benefit plans; accordingly these obligations are
calculated using the unit credit projection method (see above under Retirement Payments and Similar
Obligations).
2009 CONSOLIDATED REPORTS AND ACCOUNTS
212