kontinuita - Komunálna Poisťovňa

NOTES TO
THE FINANCIAL
STATEMENTS
as the current contractual interest rate. The Company
may also determine the amount of the impairment loss
as the difference between the financial asset’s fair
value set on the basis of its market price and financial
asset’s carrying amount.
If, in a subsequent period, the amount of the impairment
loss decreases and this decrease is objectively
related to an event that had occurred after the impairment
was recognized (such as improved credit rating of
the debtor or issuer), the reported impairment loss is
reversed by adjusting the allowance account. The
amount of the reversal is recognized in the income
statement.
(ii) Financial assets carried at fair value
The Company assesses at each balance sheet date
whether there is an objective indication that a financial
asset is impaired. In the case of equity securities classified
as available for sale, a prolonged or significant
diminution in the fair value of the security below its
cost is taken into account. If any such evidence exists
for financial assets available for sale, the cumulative
loss – measured as the difference between the acquisition
cost and current fair value, less any impairment
loss on the financial asset previously recognized in
profit or loss – is removed from valuation variances in
equity and recognized in the income statement. Impairment
losses on equity instruments that are recognized
in the income statement are not reversed to the
income statement. The impairment loss on debt securities
is reversed through the income statement if, in a
subsequent period, the fair value of a debt instrument
increases and this increase objectively relates to an
event that had occurred after the impairment loss was
recognized in profit or loss.
(iii) Impairment of other non-financial assets
Assets that have an indefinite useful life are not amortized;
however, they are tested for impairment every
year. Assets that are subject to amortization are reviewed
for impairment whenever events or changes in
circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognized
at the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs
to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for
which separately identifiable cash flows (cash-generating
units) exist. Impaired non-monetary assets other
than goodwill are reviewed at each balance sheet date
to establish whether or not the impairment can be reversed.
2.7 Offsetting financial instruments
Financial assets and liabilities are offset and the net
amount is reported in the balance sheet only when
there is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a
net basis, or to realize the asset and settle the liability
simultaneously.
2.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, sight
deposits with banks, and other high-liquid investments
with original maturity up to three months.
2.9 Share capital
Ordinary shares are classified as share capital. Additional
costs directly attributable to the issue of new equity
securities are shown in equity as a deduction, net
of tax, from the proceeds.
2.10 Insurance and investment contracts
The Company concludes contracts that transfer insurance
risk or financial risk or both.
Contracts in which the Company assumes significant insurance
risk of a third party (policyholder) and agrees
KONTINUITA ANNUAL REPORT 109