annual report 2020 - Flipbook - Side 31
INDUSTRIENS PENSIONSFORSIKRING A/S ANNUAL REPORT 2020
supplement to their valuation, a statement from
another external expert is obtained every year
concerning the market conformity of the model
and the assumptions applied.
required rate of return as well as certain
elements of the normal return, in particular the
market rent and the annual costs of
maintenance.
To a great extent, the valuations of unlisted
equity investments in private equity funds and
real estate funds etc., unlisted investment units
and unlisted bonds are based on information
from the funds themselves or from capital
managers etc., including information in reports,
many of which were prepared prior to the
reporting date. Internal procedures have been
established to ensure the quality of the
information included in measurement of fair
value. This means that temporal differences in
accounting data between the most recent
reporting and the reporting date are taken into
account; that additional information is obtained
from selected funds and capital managers; that
internal information on large transactions in
individual funds is continuously collected; that
general market developments since the most
recent reporting are evaluated; and that the
quality of the reporting received is generally
followed up on (back test).
The estimates are by nature uncertain. New
information and/or future events may therefore
lead to changes in these estimates and
consequently also in the calculated fair values.
The fair value of owner-occupied property is
calculated using a returns model which is also
defined in an annex to the Executive Order on
the Presentation of Financial Statements.
According to this model, fair value is calculated
on the basis of the budgeted, normal operating
return on the property, consisting of the market
rent less costs of operation and maintenance, as
well as a required rate of return for the type of
property in question. The fair value calculated is
adjusted by any non-recurring income and
expenses not included in the normal return, e.g.
deferred maintenance works. The most
significant estimates relate to the individual
For a more detailed description of the valuation
in this area, see the section on investment
assets and note 22, which includes a breakdown
of investment assets and financial liabilities
according to the fair value hierarchy (levels 1-3)
as well as a breakdown and further information
on the valuation etc. of level 3 assets.
Intragroup transactions
Transactions between group undertakings are
made on the basis of written agreements and
settlement is on a cost-recovery basis or on
commercial market terms.
General principles for recognition
measurement
Revenues and costs are recognised in the
income statement as they are earned or
incurred. All value adjustments, both realised
and unrealised, are therefore recognised in the
net profit or loss for the year. However, special
rules apply to value adjustments of owneroccupied properties, and under certain
conditions these adjustments are recognised
under other comprehensive income, see the
principles for measurement of owner-occupied
properties on page 32.
Assets are recognised in the balance sheet
when it is probable that future economic
NOTES
benefits will flow to the company and the value
of the asset can be reliably measured.
Income statement and statement of
comprehensive income
A liability is recognised in the balance sheet
when it is probable that future financial benefits
will flow out of the company, and the value of the
liability can be measured reliably.
Income from insurance activities
Premiums, net of reinsurance
Includes premiums and contributions due in the
financial year. Labour-market contributions and
A tax withheld are deducted from the premium
income.
Financial instruments and derivative financial
instruments are recognised on the trading day.
At initial recognition, intangible and tangible
assets are measured at cost, while other assets
and liabilities are measured at fair value.
Measurements after initial recognition take
place as described for each item below.
For
recognition
and
measurement,
unpredictable risks and losses that arise before
the annual report is presented, and which
confirm or disconfirm conditions that existed on
the reporting date, are taken into account.
Foreign currency translation
Transactions denominated in foreign currencies
are translated at the exchange rate ruling at the
transaction date. Gains and losses that arise
between the exchange rate at the transaction
date and the settlement date are recognised in
the income statement. Monetary assets and
liabilities in foreign currency are translated at the
exchange rate ruling on the reporting date.
Similarly, currency adjustments arising between
the date of the transaction and the reporting
date are also recognised in the income
statement under value adjustments.
Investment returns
Income from group and associated
undertakings
Includes the company's share of the result after
tax in group and associated undertakings
calculated in accordance with Industriens
Pension's accounting policies.
Interest income and dividends, etc.
Includes the interest earned and dividends
received on financial investment assets and
liquid assets for the financial year, including
index adjustments for index-linked bonds and
interest income on lending to group and
associated undertakings.
Value adjustments
Value adjustments contain both realised and
unrealised gains and losses on investment
assets, including foreign currency translation
adjustments except for gains and losses on
group
undertakings
and
associated
undertakings.
Administration costs in connection with
investment activities
Includes costs in connection with trading in
securities, depositary charges, remuneration for
external management, as well as own costs for
administration of investment assets, including
management fees from group undertakings.
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