Page 25 - KELAG Annual Report 2017
P. 25

An impairment loss must be recognised at the amount by which the carrying amount exceeds the
                                      recoverable  amount.  If  the  reasons  for  impairment  no  longer  apply  in  subsequent  periods,
                                      impairment losses are reversed (except in the case of goodwill).

                                      The carrying amounts of investments accounted for using the equity method are subsequently
                                      adjusted for the change in the Group’s share of the investee’s net assets in accordance with IAS 28.

                                      Shares in non-consolidated subsidiaries, associates not accounted for using the equity method
                                      and other investments are recognised in the item “other investments”. Since these interests play
                                      a subordinate role for the KELAG Group and are not material, they are recognised at acquisition
                                      cost less any impairment losses.


                                      Other interests in other entities and investments accounted for using the equity method are
                                      tested for evidence of impairment on the respective reporting date if any impairment indicators
                                      are present. Impairment tests for investments accounted for using the equity method are also
                                      carried  out  in  accordance  with  IAS  36  or  the  impairment  of  other  interests  are  assessed  in
                                      accordance  with  IAS  39.  Fair  value  of  an  investment is calculated  according to  the  fair value
                                      hierarchy in IFRS 13; it is the income-based measurement method that is primarily applied using
                                      the best available information that a hypothetical purchaser would rely on in an arm’s length
                                      transaction. Value in use is calculated using the proportional present value of the estimated future
                                      cash flow to be recorded by the investee.


                                      Securities  and  book-entry  securities  presented  in  the  statement  of  financial  position  mainly
                                      comprise  Austrian  government  bonds,  which  fulfil  the  coverage  requirement  of  Sec. 14  EStG
                                      (Austrian Income Tax Act) for pension provisions. These securities are classed as held to maturity
                                      in the KELAG Group, as, pursuant to IAS 39, the Group has the intention and ability to hold them
                                      to maturity. Acquisitions and sales are recognised at their value on  the settlement date. Any
                                      impairment losses are recognised through profit or loss. Interest income calculated using the
                                      effective interest method is recognised in the financial result in the income statement.

                                      Interest-bearing  non-current  receivables  are  allocated  to  the  loans  and  receivables  category.
                                      These are recognised using the effective interest method at amortised cost less any impairment
                                      losses.  In  the  case  of  impairment,  measurement  is  at  the  present  value  of  the  repayments
                                      expected.

                                      All trade receivables, receivables from affiliated non-consolidated entities and receivables from
                                      other investees and investors are allocated to the loans and receivables category and measured
                                      at amortised cost in accordance with IAS 39. If impairment losses are expected, the items are
                                      recognised in the statement of financial position less impairment losses for amounts that are
                                      expected to be uncollectible.
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