Annual Report 2016 > Notes Consolidated Statement Financial Position > 24. Financial instruments designated upon initial recognition at fair value through profit and loss

24. Financial instruments designated upon initial recognition at fair value through profit and loss

Accounting policies

The Group classifies financial instrument to this category when:

1) it is a hybrid instrument which includes one or more embedded derivatives qualifying for separate recognition, and the embedded derivative financial instrument cannot significantly change the cash flows resulting from the host contract or its separation from the hybrid instrument is forbidden;

2) such classification of an instrument eliminates or significantly reduces the inconsistency in measurement or recognition (the so-called accounting mismatch resulting from different measurement methods of assets and liabilities and different recognition of the related gains or losses), e.g. financial instruments economically hedged without applying hedge accounting;

3) the results on a category of financial instruments are assessed on a fair value basis, pursuant to the Group’s risk management principles or investment strategy.

The Group has a policy of financial assets and liabilities management according to which financial assets and liabilities classified as held for trading portfolio and financial assets and liabilities designated upon initial recognition at fair value through profit and loss portfolio are managed separately.

Financial instruments classified in this category are designated at fair value with changes in fair value recognised in profit and loss in net income from financial instruments at fair value through profit and loss.

Financial information

Financial instruments designated upon initial recognition at fair value through profit and loss31.12.201631.12.2015
Debt securities12 204.113 337.4
NBP money bills9 078.810 036.9
Treasury bonds PLN1 811.91 934.8
foreign currency Treasury bonds1 074.81 118.0
municipal bonds PLN110.9115.9
foreign currency municipal bonds127.7131.3
corporate bonds PLN-0.5
Units in ICF (insurance capital funds) related to insurance products belonging to the group of investment poducts where the risk is borne by the policyholder1 733.11 816.7
   
Total 13 937.2 15 154.1

Debt securities by maturity (in carrying amount)31.12.201631.12.2015
   
up to 1 month9 088.910 073.0
1 month - 3 months-6.5
3 months - 1 year171.5371.9
1 year - 5 years2 836.82 510.2
over 5 years106.9375.8
   
Total 12 204.1 13 337.4