Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Allianz Annual Report 2012

tively affected the estimated future cash flows, i.e. amounts due according to the contractual terms of the security are not considered collectible. If a held-to-maturity debt security or a loan is impaired, the related impairment loss is measured as the difference be- tween the carrying amount and the present value of esti- mated future cash flows discounted at the original effective interest rate. Ifanavailable-for-saledebtsecurityisimpaired,therelated impairment loss is measured as the difference between the security’s amortized cost and current fair value, less any previously recognized impairment losses. If the amount of the impairment of a held-to-maturity debt security or a loan subsequently increases or decreases due to an event occurring after the initial measurement of im- pairment, the change is recorded in the income statement. In a subsequent period, if the fair value of an available-for- sale debt security instrument increases and the increase can be objectively related to an event occurring after the recognition of an impairment loss, such as an improve- ment in the debtor’s credit rating, the impairment is re- versed through impairments of investments (net). Please refer to note 3, where the processes and controls for ensuring an appropriate use of estimates and assumptions are explained. Impairment of available-for-sale equity securities If there is objective evidence that the cost may not be recov- ered, an available-for-sale equity security is considered to be impaired. Objective evidence that the cost may not be recovered, in addition to qualitative impairment criteria, includes a significant or prolonged decline in the fair value below cost. The ­­­Allianz Group’s policy considers a signifi- cant decline to be one in which the fair value is below the weighted average cost by more than 20 %. A prolonged de- cline is considered to be one in which the fair value is below the weighted average cost for a period of more than nine months. If an available-for-sale equity security is impaired, any fur- ther declines in the fair value at subsequent reporting dates are recognized as impairments. Therefore, at each reporting period, for an equity security that was deter- mined to be impaired, additional impairments are recog- nized for the difference between the fair value and the Financial liabilities for unit-linked contracts The fair value of financial liabilities for unit-linked con- tracts is equal to the fair value of the financial assets for unit-linked contracts. Financial liabilities for puttable equity instruments Financial liabilities for puttable equity instruments in- clude the non-controlling interests in shareholders’ equity of certain consolidated investment funds. These interests qualify as a financial liability of the ­Allianz Group, as they give the holder the right to put the instrument back to the ­Allianz Group for cash or another financial asset (puttable instrument). These liabilities are generally required to be recorded at the redemption amount with changes recog- nized in income. Certificated liabilities, participation certificates and subordinated liabilities Certificated liabilities, participation certificates and subor- dinatedliabilitiesaresubsequentlymeasuredatamortized cost, using the effective interest method to amortize the premium or discount to the redemption value over the life of the liability. Financial guarantee contracts Financial guarantee contracts issued by the ­Allianz Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the speci- fied debtor fails to make a payment when due in accor- dance with the terms of a debt instrument. Financial guar- antee contracts which are not accounted for as insurance contracts are recognized initially at fair value. Subsequent- ly, unless the financial guarantee contract was designated at inception as at fair value through income, the ­Allianz Group measures it at the higher of the best estimate of the expenditure required to settle the present obligation and the amount initially recognized less cumulative amortiza- tion when appropriate. IMPAIRMENT OF FINANCIAL ASSETS Impairment of held-to maturity and available-for- sale debt securities and of loans A held-to-maturity or available-for-sale debt security, as well as a loan is impaired if there is objective evidence that a loss event has occurred after initial recognition of the se- curity and up to the relevant date of the ­Allianz Group’s consolidated balance sheet, and that loss event has nega- Annual Report 2012    Allianz Group232

Pages