UBI Banca Group

3. Held-to-maturity investments
3.1 Definition
Held-to-maturity investments (HTM) are defined as non derivative financial assets with fixed or
determinable payments and fixed maturity that a company intends and is able to hold to
maturity. Exception is made for those:
(a) held for trading and those designated upon initial recognition at fair value through profit
or loss (see previous section);
(b) designated as available for sale (see previous section);
(c) which satisfy the definition of loans and receivables (see section below).
When annual and interim reports are prepared the intention and ability to hold financial
assets until maturity is assessed.
The assets in question are recognised under item 50 “Held-to-maturity investments”.
3.2 Recognition criteria
Held-to-maturity investments are recognised initially when, and only when, the company
becomes a party in the contract clauses of the instrument and that is on the date of
settlement, measured at cost inclusive of any costs and income directly attributable to it. If the
recognition of assets in this category is the result of the reclassification out of “available-forsale
financial assets” or, but only and only in rare circumstances if the asset is no longer held
for sale or repurchase in the short term, out of the “financial assets held for trading”, the fair
value of the assets as measured at the time of the reclassification is taken as the new measure
of the amortised cost of the assets.
3.3 Measurement criteria
Held-to-maturity investments are valued at amortised cost using the criteria of the effective
interest rate (see the section below “loans and receivables” for a definition). The result of the
application of this method is recognised in the income statement in the item 10 “Interest and
similar income”.
When annual financial statements or interim reports are prepared objective evidence of the
existence of an impairment of the value of the assets is assessed. If there is permanent
impairment, the difference between the recognised value and the present value of expected
future cash flows discounted at the original effective interest rate is included in the income
statement under the item 130 “Net impairment losses on c) held-to-maturity investments”.
Any reversal of impairment losses recorded, should the cause that gave rise to the previous
recognition of impairment loss no longer exist, are recognised under the same item in the
income statement.
The fair value of held-to-maturity investments is measured for disclosure purposes or where
effective currency or credit risk hedges exist (in relation to the risk hedged) and it is estimated
as described in greater detail in Part A.3.2 of the Notes to the financial statements “Fair Value
Hierarchy”.
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