UBI Banca Group

performance by stock markets rather than to the specific performance of the individual
counterparty.
If there is permanent impairment, the cumulative change, including that previously recognised
in equity under the aforementioned item, is recognised directly in the income statement within
item 130 “net impairment losses on b) available-for-sale financial assets”.
Permanent impairment loss is recognised when the acquisition cost (net of any repayments of
principal and amortisation) of an available-for-sale financial asset exceeds its recoverable
amount. Any recoveries of value, which are only possible when the causes of the original
permanent impairment no longer exist are treated as follows:
• if they relate to investments in equity instruments, then with a balancing entry directly in
the equity reserve;
• if they relate to investments in debt instruments, they are recognised in the income
statement within item 130 “Net impairment losses on b) available-for-sale financial assets”.
The amount of the reversal of the impairment loss may not in any case exceed the amortised
cost which, in the absence of previous value adjustments, the instrument would have had at
that time.
Because the UBI Group applies IAS 34 “Interim financial reporting” to its half year interim
reports with consequent identification of a half year “interim period”, any impairment
incurring is recognised historically at the end of the half year.
2.4 Derecognition criteria
Available-for-sale financial assets are derecognised in the accounts when the contractual
rights to the cash flows from the financial assets expire or when the financial assets are sold
with the substantial transfer of all the risks and benefits deriving from ownership of them.
The result of the disposal of available-for-sale financial assets is recognised in the income
statement within item 100 “Income/loss from the disposal or repurchase of b) available for
sale financial assets”. Upon derecognition any corresponding amount of what was previously
recognised in shareholders’ equity under 140 “Fair value reserves” is written off against the
income statement.
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