UBI Banca Group

3.4 Derecognition criteria
Held-to-maturity investments are derecognised when the 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 rewards deriving from ownership of them The result of the disposal of held-tomaturity
financial assets is recognised in the income statement under the item 100
“Income/loss from disposal or repurchase of c) held-to-maturity investments”.
4. Loans and receivables
4.1 Definition
Loans and receivables (L&R) are defined as non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. The following are exceptions:
(a) those which it is intended to sell immediately or in the short term, that are classified as
held for trading and those that may have been designated on initial recognition as at fair
value through profit or loss;
(b) those designated upon initial recognition as available for sale;
(c) those for which the holder may not recover substantially all of its initial investment, other
than because of credit deterioration; in this case they are classified as available-for-sale.
Loans and receivables are recognised under the items 60 “Loans to banks” and 70 “Loans to
customers”.
4.2 Recognition criteria
Loans and receivables are initially recognised when the company becomes part of a loan
contract, which is to say when the creditor acquires the right to the payment of the sums
agreed in the contract. That moment corresponds to the date on which the loan is granted.
Recognition in this category may result also from the reclassification out of “available-for-sale
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 “financial assets held for trading”.
The amount initially recognised is that of the fair value of the financial instrument which is
the same as the amount granted inclusive of costs or income directly attributable to it and
determinable from the outset, independently of when they are paid. The amount of the initial
recognition does not include all those expenses that are reimbursed by the debtor
counterparty or that are attributable to internal expenses of an administrative character.
If the recognition is the result of reclassification, the fair value of the asset recognised at the
time of the reclassification is taken as the new measure of the amortised cost of the assets.
For loans not granted under market conditions, the initial fair value is calculated by using
special measurement techniques described below; in these circumstances the difference
between the fair value that is calculated and the amount granted is included directly in the
income statement within the item interest.
Contango and repo agreements with the obligation or right to repurchase or resell at term are
recognised as funding or lending transactions. For transactions with a spot sale and forward
repurchase, the spot cash received is recognised in the accounts as borrowings while the spot
purchase transactions with forward resale are recognised as lending for the spot amount paid.
4.3 Measurement criteria
Loans and receivables are measured at amortised cost using the criteria of effective interest.
The amortised cost of a financial asset or financial liability is the amount at which the
financial asset or financial liability was measured upon initial recognition net of principal
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