UBI Banca Group

Interest is recognised on an accruals basis that takes into account the effective yield of the
asset. In detail:
• interest income includes the amortisation of any discounts, premiums or other differences
between the initial carrying amount of a security and its value at maturity;
• arrears of interest that are considered recoverable are recognised in the item 10 “Interest
and similar income”, but only the part considered recoverable.
Dividends are recognised when shareholders acquire the right to receive payment.
Expenses or revenues resulting from the sale or purchase of financial instruments, determined
by the difference between the amount paid or received for the transaction and the fair value of
the instrument are recognised in the income statement on initial recognition of the financial
instrument when the fair value is determined:
• by making reference to current and observable market transactions in the same
instrument;
• by using valuation techniques which use, as variables, only data from observable markets.
14.6 Expenses
Expenses are recognised in the accounts at the time at which they are incurred while following
the criteria of matching expenses to revenues that result directly and jointly from the same
transactions or events. Expenses that cannot be associated with revenues are recognised
immediately in the income statement.
Expenses directly attributable to financial instruments measured at amortised cost and
determinable from the outset, regardless of the time at which they are settled, are recognised
in the income statement by applying the effective interest rate, a definition of which is given in
the section “Loans and receivables”.
Impairment losses are recognised through profit and loss in the year in which they are
measured.
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