UBI Banca Group

individual renewals, or if the assets are held under a finance lease contract, over the
expected useful life of the assets concerned.
The depreciation of improvements and expenses to increase the value of leased assets
recognised under item 160 “Other assets” is recognised under item 220 “Other operating
income (expense)”.
At the end of each annual or interim reporting period the existence of indications that
demonstrate the impairment of the value of an asset are assessed. The loss is determined by
comparing the carrying amount of the item of property, equipment and investment property
with the lower recoverable amount. The latter is the greater of the fair value, net of any sales
costs, and the relative use value intended as the present value of future cash flows generated
by the asset. The loss is immediately recognised in the income statement under item 200 “Net
impairment losses on property, equipment and investment property”; the item also includes
any future recovery in value if the causes of the original write down no longer exist
7.4.1 Definition and measurement of fair value
7.4.1.1 Properties
The fair value is measured on the basis of the market value intended as meaning the best
price at which the sale of a property might reasonably be expected to have been completed
unconditionally for cash consideration on the measurement date, assuming:
that the seller and the purchaser are independent counterparties;
the intention of the seller to sell the assets is real;
that there is a reasonable period (having regard to the nature of the property and the
state of the market) for the proper marketing of the property and for the agreement of
price and terms necessary to complete the sale;
that the market trend, level of values and other circumstances were, at the date of
signing the preliminary contract of purchase and sale, identical to those existing at the
measurement date;
that no account is taken of bids by purchasers for whom the property has
characteristics which make it “outside the market range”.
The procedures adopted for determining the market value are based on the following methods:
• the direct comparative or market method, based on a comparison between the asset in
question and other similar assets subject to sale or currently on sale on the same market or
competing markets;
• the income method based on the present value of potential market incomes for a similar
property, obtained by capitalising the income at a market rate.
The above methods are performed individually and the values obtained are appropriately
averaged.
7.4.1.2 Determination of the value of land
The method used for identifying the percentage of the market value attributable to land is
based on an analysis of the location of the property, taking account of the type of construction,
the state of conservation and the cost of rebuilding the entire building.
266