In compliance with the deferral option IFRS 9 under IFRS 4, a.s.r. conducted a solely payments of principal and interest (SPPI) test on the financial assets.
For the purpose of this assessment, principal is defined as the fair value of the financial asset on initial recognition. However, the principal may change over time – e.g. if there are repayments of principal.
Interest is defined as consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks (e.g. liquidity risk) and costs (e.g. administrative costs), as well as a profit margin that is consistent with a basic lending arrangement. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are SPPI.
In assessing whether the contractual cash flows are solely payments of principal and interest, a.s.r. considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
Variable interest rates;
Term extension features;
Contingent events; and
Terms that limit a.s.r.’s claim to cash flows from specified assets – e.g. non-recourse asset arrangements.
|Amounts in € millions||Fair value at 31 December 20221||Carrying amount at 31 December 2022||Fair value movement 2022||Fair value at 31 December 20211||Carrying amount at 31 December 2021||Fair value movement 2021|
|Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest:|||||||||||||
|Trade and other receivables||605||605||-222||827||827||-3|
|Other financial assets||142||142||18||124||124||-24|
|Other financial assets2|||||||||||||
|Rural property contracts||-||-||-215||215||215||72|
|Equities and other participating interest||3,560||3,560||-576||4,136||4,136||620|
|Real estate equity funds||3,974||3,974||1,772||2,202||2,202||173|
|Mortgage equity funds||987||987||-192||1,179||1,179||196|
|Other financial assets||527||527||63||464||464||-50|
|Investments on behalf of policyholders||9,912||9,912||-1,662||11,574||11,574||1,420|
|Investments related to investment contracts||2,000||2,000||48||1,952||1,952||1,952|
|Due from customers||10,957||12,307||-1,252||12,209||11,461||2,722|
|Due from credit institutions||4,327||4,259||645||3,682||2,971||-2,100|
|Cash and cash equivalents||2,245||2,245||-61||2,306||2,306||-557|
|Total financial assets||61,781||63,064||-11,118||72,900||71,441||-2,644|
The fair value movement relates to the revaluations during the year of the financial assets; total movement less the net additions.
|||Gross carrying amount at 31 December 2022||Gross carrying amount at 31 December 2021|
|Credit risk rating|||||
|Total financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest||775||978|
The credit risk of the assets not rated (trade and other receivables and other financial assets), is considered low. For more detailed information about the credit risks of a.s.r., see chapter 6.8.3 and chapter 6.8.4.
|||Fair value at 31 December 2022||Gross carrying amount at 31 December 2022||Fair value at 31 December 2021||Gross carrying amount at 31 December 2021|
|Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest:|||||||||
|Trade and other receivables||472||500||585||611|
|Total fair value of financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest without low credit risk||472||500||585||611|