Letno poročilo 2007 - UniCredit Banka Slovenija dd

the carrying amount of the asset is reduced to its recoverableamount. That reduction is an impairment loss.A reversal of an impairment loss for an asset is recognisedimmediately in profit or loss.The carrying amount of an item of property, plant and equipmentis derecognised on disposal or when no future economic benefitsare expected from its use or disposal. The gain or loss arising fromderecognition of an item is included in profit or loss when the itemis derecognised. The gain or loss arising from derecognition ofan asset is determined as the difference between the net disposalproceeds, if any, and the carrying amount of the item.Other assetsOther assets consist of prepaid expenses, accrued income, otherassets held-for-sale and similar assets that are not disclosed underany other item. Assets held-for-sale are stated at their fair value.Financial liabilitiesFinancial liabilities are recognized at fair value. After initialrecognition, the Bank measures all financial liabilities at amortisedcost using the effective interest method.The Bank had not yet recognized any financial liabilities at fair valuethrough profit or loss.The position financial liability held for trading represents negativemarket value of trading derivatives.ProvisionsA provision is recognised when the Bank has a present obligationas a result of a past event and when it is probable that an outflow ofresources embodying economic benefits will be required to settle theobligation and a reliable estimate can be made of the amount of theobligation.Provisions are recognised for:• potential losses relevant to the risks resulting from off-balancesheet items;• jubilee awards and severance payments;• pending or threatened litigation..Cash flow statementFor the purpose of the cash flow statement, cash is defined as cashin hand and current accounts with banks, including the compulsoryminimum reserve with the Bank of Slovenia. Cash equivalents areshort-term, highly liquid investments that are readily convertible toknown amounts of cash and which are subject to an insignificant riskof changes in value. It comprises financial assets held for trading,available for sale and held to maturity financial assets.Employee benefitsThe Bank provides its employees with jubilee awards and severancepayments. The employees are entitled to claim jubilee awards incircumstances where they have been employed by the Bank fora defined period of time. The employees are entitled to receiveseverance payments if they are employed by the Bank until theirretirement age and were employed by the Bank for a minimumdefined period.Valuations of these obligations are carried out by independentqualified actuaries using projected unit credit method. The actuarialparameter and assumptions included in the calculation of theobligation are:•••••••••discount rate determined by reference to market yields as of thebalance sheet date on high quality corporate bonds for the Eurozone;estimated future salary increases;anticipated increase of jubilee awards;mortality rates - Slovenian mortality table 2000 - 2002;fluctuation (termination without payment) depending on Bank’spast experience in service time;retirement age: 58 for women, 60 for men;Bank’s most recent employee data (the length of employment withthe Bank, age, gender, average salary);average monthly salary in the Republic of Slovenia;if, on the valuation date, the calculated retirement age has alreadybeen reached or exceeded, the retirement has been assumed totake place 6 months after the valuation date.These obligations are measured at the present value of futurecash outflows. The gains and losses are recognised in the incomestatement.Actuarial gains and losses, arising from experience adjustmentsand from changes in actuarial assumptions, in excess of the greaterof ten percent of the value of plan assets or ten percent of thedefined benefit obligation, are charged or credited to income overthe expected average remaining working life-time of the relatedemployees.The Bank recognized in 2007, for the first time, the cost ofcompensated absences for unused holidays.UniCredit Bank · 2007 Annual Report 159