Page 79 - Annual_Report_2016
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aia.gr Annual Report 2016
2.17.4 Interest income
Interest income is recognised on a time-proportion basis using the effective interest method. When a
receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the
estimated future cash flow discounted at the original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on impaired loans and receivables is recognised
using the original effective interest rate.
2.17.5 Dividend income
Dividend income is recognised when the right to receive payment is established.
2.18 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must
not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or the counterparty.
2.19 Leases
Leases under which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Payments made by the Company under operating leases (net of any
incentives received from the lessor) are charged to the income statement on a straight-line basis over the
period of the lease.
The Company does not lease any material property, plant or equipment under finance leases under which it
substantially retains all the risks and rewards of ownership.
2.20 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
2.21 Fair value estimation and hierarchy
Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not
based on observable market data.
The carrying value of receivables and payables are assumed to approximate their fair values at the balance
sheet date. The fair value of financial assets held to maturity and Available-for-sale financial asset is
assessed using quoted prices in active market (Level 1). The fair value of loans is estimated by the method
of discounting the future contractual cash flows at the current market interest rate swaps for the average
duration of the loan which corresponds to the average duration of the relevant debt obligation (Level 2).
During the year there were no transfers between Level 1 and Level 2 and no transfers into and out of Level 3
for the measurement of fair value.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20.0% and 50.0% of the voting rights. Investments in associates
are initially recognised at cost and subsequently at cost less any impairment losses. Dividend income is
recognised when the right to such income is established.
The Company’s investment in its associate amounts to €3.25m as of 31 December 2016 represents less than
1.0% of total assets at that date. This investment has not been accounted for under the equity method of
accounting on the basis that it is not considered to be material to the Company’s operations and the departure
from IAS 28 is unlikely to influence the economic decision of the users of these financial statements.
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
32 of 57
2.17.4 Interest income
Interest income is recognised on a time-proportion basis using the effective interest method. When a
receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the
estimated future cash flow discounted at the original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on impaired loans and receivables is recognised
using the original effective interest rate.
2.17.5 Dividend income
Dividend income is recognised when the right to receive payment is established.
2.18 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must
not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or the counterparty.
2.19 Leases
Leases under which a significant portion of the risks and rewards of ownership are retained by the lessor
are classified as operating leases. Payments made by the Company under operating leases (net of any
incentives received from the lessor) are charged to the income statement on a straight-line basis over the
period of the lease.
The Company does not lease any material property, plant or equipment under finance leases under which it
substantially retains all the risks and rewards of ownership.
2.20 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
2.21 Fair value estimation and hierarchy
Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly.
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not
based on observable market data.
The carrying value of receivables and payables are assumed to approximate their fair values at the balance
sheet date. The fair value of financial assets held to maturity and Available-for-sale financial asset is
assessed using quoted prices in active market (Level 1). The fair value of loans is estimated by the method
of discounting the future contractual cash flows at the current market interest rate swaps for the average
duration of the loan which corresponds to the average duration of the relevant debt obligation (Level 2).
During the year there were no transfers between Level 1 and Level 2 and no transfers into and out of Level 3
for the measurement of fair value.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20.0% and 50.0% of the voting rights. Investments in associates
are initially recognised at cost and subsequently at cost less any impairment losses. Dividend income is
recognised when the right to such income is established.
The Company’s investment in its associate amounts to €3.25m as of 31 December 2016 represents less than
1.0% of total assets at that date. This investment has not been accounted for under the equity method of
accounting on the basis that it is not considered to be material to the Company’s operations and the departure
from IAS 28 is unlikely to influence the economic decision of the users of these financial statements.
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
32 of 57
