BANCO BILBAO VIZCAYA ARGENTARIA, S.A. AND ... - BBVA

Held for trading (assets and liabilities)
Impaired/doubtful/non-performing portfolio
Impaired financial assets
Income from equity instruments
Insurance contracts linked to pensions
Inventories
Investment properties
Jointly controlled entities
Leases
Liabilities associated with non-current assets held for sale
Liabilities under insurance contracts
Loans and advances to customers
Loans and receivables
Minority interests
Mortgage-backed bonds
Non-current assets held for sale
Other equity instruments
Financial assets and liabilities acquired or incurred principally for the purpose of selling
or repurchasing them in the near term with a view to profiting from variations in their
prices or by exploiting existing differences between their bid and ask prices.
This category also includes financial derivatives not qualifying for hedge accounting,
and in the case of borrowed securities, financial liabilities originated by the firm sale of
financial assets acquired under repurchase agreements or received on loan (“short
positions”).
Financial assets whose carrying amount is higher than their recoverable value,
prompting the entity to recognize the corresponding impairment loss
A financial asset is deemed impaired, and accordingly restated to fair value, when there
is objective evidence of impairment as a result of one or more events that give rise to:
1. A measurable decrease in the estimated future cash flows since the initial
recognition of those assets in the case of debt instruments (loans and receivables and
debt securities).
2. A significant or prolonged drop in fair value below cost in the case of equity
instruments.
Dividends and income on equity instruments collected or announced during the year
corresponding to profits generated by investees after the ownership interest is acquired.
Income is recognized gross, i.e., without deducting any withholdings made, if any.
The fair value of insurance contracts written to cover pension commitments.
Assets, other than financial instruments, under production, construction or
development, held for sale during the normal course of business, or to be consumed in
the production process or during the rendering of services. Inventories include land and
other properties held for sale at the real estate development business.
Investment property is property (land or a building—or part of a building—or both) held
(by the owner or by the lessee under a finance lease) to earn rentals or for capital
appreciation or both, rather than for own use or sale in the ordinary course of business.
Companies over which the entity exercises control but are not subsidiaries are
designated "jointly controlled entities". Joint control is the contractually agreed sharing
of control over an economic activity or undertaking by two or more entities, or
controlling parties. The controlling parties agree to share the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. It
exists only when the strategic financial and operating decisions require unanimous
consent of the controlling parties.
A lease is an agreement whereby the lessor conveys to the lessee in return for a
payment or series of payments the right to use an asset for an agreed period of time, a
stream of cash flows that is essentially equivalent to the combination of principal and
interest payments under a loan agreement.
The balance of liabilities directly associated with assets classified as non-current assets
held for sale, including those recognized under liabilities in the entity's balance sheet at
the balance sheet date corresponding to discontinued operations.
The technical reserves of direct insurance and inward reinsurance recorded by the
consolidated entities to cover claims arising from insurance contracts in force at periodend.
Loans and receivables, irrespective of their type, granted to third parties that are not
credit entities and that are not classified as money market operations through
counterparties.
Financing extended to third parties, classified according to their nature, irrespective of
the borrower type and the instrumentation of the financing extended, including finance
lease arrangements where the consolidated subsidiaries act as lessors.
Minority interest is that portion of the profit or loss and net assets of a subsidiary
attributable to equity interests that are not owned, directly or indirectly through
subsidiaries, by the parent, including minority interests in the profit or loss of
consolidated subsidiaries for the reporting period.
Fixed-income securities guaranteed with the mortgage loans for the issuing entity,
which, in accordance with current legislation to that effect, are not subject to the
issuance of mortgage bonds.
A non-current asset or disposal group, whose carrying amount is expected to be
realized through a sale transaction, rather than through continuing use, and which
meets the following requirements:
a) it is immediately available for sale in its present condition at the balance sheet date,
i.e. only normal procedures are required for the sale of the asset.
b) the sale is considered highly probable.
This heading reflects the increase in equity resulting from various forms of owner
contributions, retained earnings, restatements of the financial statements and valuation
adjustments.
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