UBI Banca Group

5.3.3 Hedging portfolios of assets and liabilities
Hedging of portfolios of assets and liabilities (“macrohedging”) and appropriate accounting
treatment is possible after first:
- identifying the portfolio to be hedged and dividing it by maturity dates;
- designating the risk to be hedged;
- identifying the interest rate risk to be hedged;
- designating the hedging instruments;
- determining the effectiveness.
The portfolio for which the interest rate risk is hedged may contain both assets and liabilities.
This portfolio is divided on the basis of expected maturity or repricing dates of interest rates
after first analysing the structure of the cash flows.
Changes in the fair value of the hedged instrument are recognised in the income statement
under item 90 “Net hedging income (loss)” and in the balance sheet under item 90 “Fair value
change in hedged financial assets” or under item 70 “Fair value change in hedged financial
liabilities”.
Changes occurring in the fair value of the hedging instrument are recognised in the income
statement within item 90 “Net hedging income (loss)” and under assets in the balance sheet in
item 80 “Hedging derivatives” or under liabilities side in item 60 “Hedging derivatives”.
6. Equity investments
6.1 Definition
6.1.1 Associates
An “associate” is defined as a company in which at least 20% of the voting rights are held or
over which the investing company exercises significant influence and which is neither a
subsidiary nor a company subject to joint control by the investing company. Significant
influence is the power to participate in the financial and operating policy decisions of the
company invested in but not to control or have joint control of it.
6.1.2 Companies subject to joint control
A “company subject to joint control” is defined as a company governed by a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to
joint control.
6.2 Recognition criteria
Equity investments in associates or joint ventures are recognised at cost of purchase plus any
accessory costs.
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