UBI Banca Group

6.3 Measurement criteria
Investments in associates are valued using the equity method. Investments in companies
subject to joint control are measured by adopting either the equity method or the
proportionate method
Any objective evidence that an equity investment has been subject to impairment is assessed
as at each annual or interim reporting date. The recoverable amount is then calculated,
considering the present value of the future cash flows which may be generated by the
investment, including the final disposal value. If the recoverable amount calculated in this way
is less than carrying value the difference is recognised in the income statement under 240
“Profits (losses) of equity investments (valued at equity)”. Any future reversals of impairment
are also included in the item where the reasons for the original impairment no longer apply.
6.4 Derecognition criteria
Equity investments are derecognised in the balance sheet 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 rewards deriving from ownership of them. The result of
the disposal on investments valued using the equity method recognised in the income
statement under item 240 “Profits (losses) of equity investments (valued at equity)”; the result
of the disposal of equity investments other than those valued using the equity method is
recognised in the income statement under item 270 “Profits (losses) on the disposal of
investments.
7. Property, equipment and investment property
7.1 Definition of assets for functional use
“Assets for functional use” are defined as tangible assets possessed to be used for the purpose
of carrying on a company’s business and where the use is planned to last longer than one
year.
Assets for functional use also include properties rented to employees, ex employees and their
heirs, as well as works of art.
7.2 Definition of investment property
“Investment property” is defined as properties held in order to earn rentals or for capital
appreciation. As a consequence, investment property is to be distinguished from assets held
for the use of the owner because they generate cash flows that are very different from the other
assets held by the banking group.
Finance lease contracts are also included within property, equipment and investment property
(for functional use and held for investment) even if the legal title to the assets remains with the
leasing company.
7.3 Recognition criteria
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