GENERAL MEETING DRAFT - Bankier.pl

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>> Financial Statements
Part A – Accounting Policies
Any goodwill arising on the acquisition of a foreign operation whose assets are located or managed in a
currency other than the euro, and any fair value adjustments of the carrying amounts of assets and
liabilities are treated as assets and liabilities of the foreign operation, expressed in the functional currency
of the foreign operation and translated at the closing rate.
On the disposal of a foreign operation, the cumulative amount of the exchange rate differences relating to
the foreign operation are recognised in profit or loss when the gain or loss on disposal is recognised.
All exchange differences recorded under revaluation reserves in shareholders' equity are also reported in
the Statement of Comprehensive Income.
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IFRS 4 defines an insurance contract as a contract under which one party (the insurer) accepts significant
insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a
specified uncertain future event (the insured event) adversely affects the policyholder.
These policies are recognised briefly as follows:
� in profit and loss item 160 “Other income (net) from insurance activities”: gross premium including
all amounts due during the year under insurance contracts, net of cancellations. Premium
transferred to reinsurers during the year is also recognised in this item;
� in the liability item 130 “Insurance reserves”: contractual obligations to policyholders, calculated
analytically contract by contract using the prospective method, on the basis of demographic and
financial projections currently used by the market;
� in the asset item 110 “Insurance reserves attributable to reinsurers”: reinsurers’ liabilities.
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A business combination is the bringing together of separate entities or businesses into one reporting
entity.
A business combination may result in a Parent-subsidiary relationship in which the acquirer is the Parent
and the acquiree a subsidiary of the acquirer.
A business combination may involve the purchase of the net assets, including any goodwill, of another
entity rather than the purchase of the equity of the other entity (mergers).
IFRS 3 requires that all business combinations shall be accounted for by applying the purchase method,
that involves the following steps:
� identifying an acquirer;
� measuring the cost of the business combination;
and
� allocating, at the acquisition date, the cost of the business combination to the assets acquired and
liabilities and contingent liabilities assumed.
The cost of a business combination is the aggregate of the fair value, at the date of exchange, of assets
given, liabilities incurred or assumed and equity instruments issued by the acquirer, in exchange for
control of the acquiree, plus any costs directly attributable to the business combination.