Page 28 - Annual Report KELAG Group 2018
P. 28

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.
           The first-time application of IFRS 9 resulted in an evaluation of the investments in the Group not
           previously accounted for using the equity method. Details about the effect from the first-time
           application of IFRS 9 can be found in the section on new IFRSs/IFRICs.

           Investments accounted for using the equity method are tested for evidence of impairment on the
           respective reporting date if any impairment indicators are present and subject to impairment
           tests pursuant to IAS 36 if necessary. 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 are carried at amortised cost because the
           payments exclusively comprise interest and principal payments and they are held to collect the
           contractual cash flows. These securities are measured using the effective interest method in the
           consolidated financial statements of the KELAG Group with reference to IFRS 9. 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.
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