kontinuita - Komunálna Poisťovňa

NOTES TO
THE FINANCIAL
STATEMENTS
date, or whenever an employee accepts voluntary redundancy
in exchange for these benefits. The Company
recognizes redundancy payments when it is
demonstrably committed to either: terminating the
employment of current employees according to a detailed
formal plan without possibility of withdrawal;
or providing redundancy payments as a result of an
offer made to encourage voluntary termination of
employment. Payments falling due more than 12
months after the balance sheet date are discounted
to present value.
2.14 Provisions
Provisions for legal claims are recognized when: the
Company has a present legal or other obligation as a
result of past events; it is more likely than not that an
outflow of resources will be required to settle the obligation;
and the amount of the obligation can be reliably
estimated. Provisions are not recognized for
future operating losses.
2.15 Revenue recognition
Interest income from financial assets that are not
stated at fair value through profit or loss is recognized
as revenue, using the effective interest method.
2.16 Leasing
Leases in which the lessor retains a significant portion
of the risks and rewards of ownership are classified as
operating leases. Payments made under operating
leases are charged to the income statement on
a straight-line basis over the period of the lease.
2.17 Dividend distribution
Dividend distribution to the Company’s shareholders is
recognized as a liability in the Company’s financial
statements in the period in which the Company’s
shareholders approve the profit distribution and the
dividend amount.
3. Critical accounting estimates and judgments in applying
accounting policies
The Company makes estimates and uses assumptions
that affect the reported amounts of assets and
liabilities in the following accounting periods. Estimates
and judgments are continually revaluated
based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable.
Significant estimates and assumptions where there is
a risk of significant adjustments to the book value of
assets and liabilities during the following accounting
period are described below.
(i) The ultimate liability arising from claims made
under accident insurance contracts
An estimate of the ultimate liability arising from claims
made under insurance contracts is an important accounting
estimate the Company makes.
The Company provides accident insurance; therefore,
there is an uncertainty arising from the fact that a
claim may be reported within a few years after the insured
event has occurred. As a result, the Company
sets up a reserve for insured events incurred but not
reported (IBNR reserve).
KONTINUITA ANNUAL REPORT 119