Annual Report 2022
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Annual Report 2022 Financial statements Other notes
6.7.3
Fair value of financial assets categorised into two groups based on business model and SPPI test results

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.

In making this assessment, a.s.r. considers the following:

  • Variable interest rates;

  • Prepayment features;

  • 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.

Fair value of financial assets based on SPPI test results
Amounts in € millionsFair value at 31 December 20221Carrying amount at 31 December 2022Fair value movement 2022Fair value at 31 December 20211Carrying amount at 31 December 2021Fair 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 receivables605605-222827827-3
Other financial assets14214218124124-24
​747747-204952952-26
​​​​​​​
Other financial assets2​​​​​​
Government bonds9,2279,227-4,92214,14914,149-3,241
Corporate bonds7,1887,188-3,63910,82710,827-990
Rural property contracts---21521521572
Asset-backed securities416416-115530530126
Preference shares289289-22311311-5
Derivatives5,4285,428-7846,2126,212-2,956
Equities and other participating interest3,5603,560-5764,1364,136620
Real estate equity funds3,9743,9741,7722,2022,202173
Mortgage equity funds987987-1921,1791,179196
Other financial assets52752763464464-50
Investments on behalf of policyholders9,9129,912-1,66211,57411,5741,420
Investments related to investment contracts2,0002,000481,9521,9521,952
Due from customers10,95712,307-1,25212,20911,4612,722
Due from credit institutions4,3274,2596453,6822,971-2,100
Cash and cash equivalents2,2452,245-612,3062,306-557
​61,03462,317-10,91471,94870,489-2,618
​​​​​​​
Total financial assets61,78163,064-11,11872,90071,441-2,644
  • 1 The carrying value of the trade and other receivables is regarded as a good approximation of the fair value, as these assets have a short-term nature.
  • 2 Other financial assets include the financial assets that fall into the business model held for trading and managed on a fair value basis or those financial assets with contractual terms that do not give rise on specified dates to cash flows that are solely payments of principal and interest.

The fair value movement relates to the revaluations during the year of the financial assets; total movement less the net additions.

Credit risk exposure for financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest
​Gross carrying amount at 31 December 2022Gross carrying amount at 31 December 2021
Credit risk rating​​
AA5489
A96
Not rated712883
​​​
Total financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest775978

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 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
​Fair value at 31 December 2022Gross carrying amount at 31 December 2022Fair value at 31 December 2021Gross 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 receivables472500585611
​​​​​
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 risk472500585611
6.7.2 Offsetting of financial assets and liabilities6.7.4 Related party transactions
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