KB prezent. angl - Komerční banka

072 ➔073
Unconsolidated Financial Statements
under CAS
In circumstances where the quoted market prices are not readily available, the fair value of debt securities is estimated using the
present value of future cash flows and the fair value of unquoted equity instruments is estimated using applicable price/earnings or
price/cashflow ratios refined to reflect the specific circumstances of the issuer. If equity securities cannot be measured using the
methods referred to above or on any other valuation basis they are carried at cost.
The Bank assesses on a regular basis whether there is any objective evidence that a security carried in the available for sale portfolio
may be impaired. A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount which is equal
to the present value of the expected future cash flows discounted at the financial instrument’s original effective interest rate.
The amount of the impairment loss for assets carried at amortised cost is calculated as the difference between the asset’s carrying
amount and its recoverable amount. When impairment of assets is identified, the Bank recognises provisions through the profit and
loss statement line Net profit or loss on financial operations.
(f) Tangible and intangible fixed assets
Tangible and intangible fixed assets are stated at historical cost less accumulated depreciation together with accumulated impairment
losses. Fixed assets are depreciated through the accumulated depreciation charge. Depreciation is calculated on a straight line basis
to write off the cost of each asset to their residual values over their estimated useful economic life. Land, works of art and assets in
the course of construction are not depreciated.
The estimated useful economic lives in years are set out below:
Machinery and equipment, computers, vehicles 4
Fixtures, fittings and equipment 6
Energy machinery and equipment 12
Distribution equipment 20
Buildings and structures 30
Low value fixed assets costing less than CZK 40 thousand in the case of tangible fixed assets and CZK 60 thousand in the case of
intangible fixed assets (including expenses having the nature of technical improvements) are charged to the profit and loss statement
when the expenditure is incurred. Technical improvements costing greater than CZK 40 thousand in respect of tangible and intangible
fixed assets increase the acquisition cost of the related fixed asset. Acquisition costs of know-how greater than CZK 60 thousand
with an estimated useful life exceeding one year are recorded as intangible fixed assets.
The Bank periodically tests its assets for impairment. Where the carrying amount of an asset is greater than its estimated recoverable
amount, it is written down to its recoverable amount. Where assets are identified as being surplus to the Bank’s requirements, the
management of the Bank determines a provision for an asset impairment. In respect of the assets owned by the Bank, the provision
is assessed by reference to a net selling price based on third party valuation reports adjusted downwards for an estimate of
associated sale costs. Leasehold assets are provisioned by reference to the net present value of future costs and the residual value
of any technical improvements.
Repairs and renewals are charged directly to the profit and loss statement when the expenditure is incurred.
(g) Leases
Assets held under finance leases are not recognised on the balance sheet over the lease term. These assets are recorded in the off
balance sheet records. Amounts related to fixed assets acquired under finance leases are amortised and expensed over the lease
term. The future lease payments of the Bank are made by reference to the payment schedule agreed upon within the finance lease
arrangement.
At present the Bank does not act as a lessor for finance leases.
(h) Provisions
Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past events, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount
of the obligation can be made.