annual report 2020 - Flipbook - Side 33
INDUSTRIENS PENSIONSFORSIKRING A/S ANNUAL REPORT 2020
Industriens Pension holds between 20% and
50% of the voting rights and exercises
significant influence are recognised as
associated undertakings (see note 11 to the
financial statements). In certain situations,
investments with an equity interest of more than
20% are recongnised as equity investments in
the balance sheet. These are situations in which
a specific assessment shows that Industriens
Pension has neither a controlling influence nor
significant influence.
Equity investments in group undertakings and
associated undertakings are measured at initial
recognition at cost, and subsequently according
to the equity method. According to this method,
equity investments are recognised as the
proportionate share of the undertakings' result
and equity, calculated according to the
accounting policies of Industriens Pension. This
means that property, plant and equipment (e.g.
wind turbines) and investment assets (e.g.
investment properties) in group undertakings
and associated undertakings are valued at cost
in the construction phase, and subsequently at a
revalued fair value for property, plant and
equipment and at fair value for investment
assets.
The fair value of wind turbines and investment
properties is calculated as the present value of
expected future cash flows during a planning
period of 25 years and 10 years, respectively,
calculated on the basis of an individual fixed
discount rate.
Increases and decreases in fair values of
investment assets in group undertakings and
associated undertakings are fully recognised in
the income statement under income from such
undertakings.
Loans to group and associated
undertakings
Loans to group and associated undertakings are
measured at amortised cost.
Other financial investment assets
Listed equity investments and investment units
are measured at fair value, calculated at the
official closing prices on the reporting date. For
equity investments and investment units that are
not actively traded, a calculated rate is used.
Unlisted equity investments, investment units
and bonds are measured at estimated fair value
using recognised valuation methods, for
example by comparing with similar assets for
which a fair value is available or by discounting
expected future cash flows etc.
Listed bonds are measured at fair value based
on official market prices on the reporting date,
which are modified according to the trading
activity etc. on the individual markets. A
calculated rate is generally used for bonds that
are not actively traded. Unlisted bonds are
measured at an estimated fair value by means of
recognised valuation methods, see above. The
fair value of called bonds is measured at present
value.
Bonds that are sold and repurchased forward
(genuine sale and repurchase transactions) are
part of the bond portfolio. The fair value of these
at the end of the financial year is shown in note
17 to the financial statements on collateral
ceded.
Listed and unlisted derivative financial
instruments are measured at fair value on the
reporting date. Fair value is set at the midmarket prices on the reporting date. Positive fair
NOTES
values are recognised in the balance sheet
under other financial investment assets, and
negative values are recognised in the balance
sheet under other debt. Value adjustments are
recognised under value adjustments. Note 21 to
the financial statements shows a summary of the
derivative financial instruments with associated
fair values.
Information on prices etc. appearing after the
closing date of the financial statements will only
be recognised if these are material to
assessment of the annual financial statements.
Investment assets attached to market-rate
products
Investment assets attached to market-rate
products are recognised and measured
according to the same principles as other
investment assets, see above.
will be repaid to the company by the Danish Tax
Agency (Skattestyrelsen). Furthermore, a
negative individual tax on yields of certain
pension-scheme assets is recognised under tax
assets. In years with a negative addition of
interest to the market-rate scheme, this tax is
recognised under life-assurance provisions, and
it will be offset against positive additions of
interest in future years.
Subordinated loan capital
Subordinated loan capital includes excess
capital and other subordinated loan capital, and
constitutes risk capital provided by the
members. Excess capital comprises special
bonus provisions type B, and interest is accrued
at the same rate as equity, whereas other
subordinated loan capital comprises special
bonus provisions type A, with interest accrued
on market terms. Subordinated loan capital is
included in own funds to meet the solvency
capital requirement.
Receivables
Receivables are measured at amortised cost,
which usually corresponds to nominal value.
Deductions are made to account for any losses.
Deferred tax assets
Negative tax on yields of certain pensionscheme assets calculated on a negative tax
basis (tax on yields of certain pension-scheme
assets at institution level) is recognised as an
asset in the balance sheet for offsetting in
positive tax on yields of certain pension-scheme
assets in subsequent years, provided it is likely
that such offset can be utilised in the years to
come. These considerations include the fact
that, under certain conditions, tax assets not
utilised to offset positive tax on yields of certain
pension-scheme assets during the first five
calendar years after the tax asset was created
Provisions for insurance and investment
contracts
Premium provisions
Relate to sickness and accident insurance and
cover the present value of expected future
payments concerning claims and costs of
insurance events which can be expected to
occur after the end of the financial year.
Life-assurance provisions at average rate
Life-assurance provisions at average rate are
calculated at market value with the technical
basis notified to the Danish Financial
Supervisory Authority. Provisions are calculated
as the present value of the expected future
payments for current insurance contracts, based
on a discounting yield curve and assumptions on
insurance risks (mortality rate and disability, etc.)
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