Financial assets are recognized if Wincor Nixdorf has a contractual right to receive cash or another financial asset from another party. Financial liabilities are recognized if Wincor Nixdorf has a contractual obligation to transfer cash or other financial assets to another party. Purchases and sales of financial assets are basically recognized as of the settlement date. However, purchases and sales of securities are accounted for with the settlement price at trade date.
Financial assets and liabilities are initially measured at fair value. The carrying amount of financial instruments which are not measured at fair value through profit or loss in subsequent periods includes also the directly attributable transaction costs.
Subsequent measurement of financial instruments recognized in Wincor Nixdorf Group accounts is in line with the measurement categories defined in IAS 39 “Financial Instruments: Recognition and Measurement”:
- Financial Asset at Fair Value through Profit or Loss (FAHfT): fair value
- Held-to-maturity investments (HtM): amortized costs
- Loans and Receivables (LaR): amortized costs
- Available-for-sale financial assets (AfS): fair value
- Financial Liabilities (FLAC): amortized costs
There were no reclassifications between the different IAS 39 measurement categories in the year under review.
Financial assets and liabilities are reported without being offset. They are only offset when there is a legal right to do so and the enterprise intends to settle them on a net basis. The recognized carrying amount of current financial assets and liabilities is an appropriate estimate of the fair value.
In accordance with IAS 39, an impairment loss is recognized when there are substantial, objective indications of impairment of a financial asset. Financial assets are examined for impairment requirements both individually (specific allowances for impairment losses) and in groups with similar default risk profiles (specific impairment allowances calculated on a portfolio basis). The expenses are recorded in profit and loss under the functional cost headings. Appropriate risk provisioning was recognized for all discernible risks of default. The theoretically maximum remaining risk of default of financial assets is therefore the same as their recognized carrying amounts.
Financial assets are derecognized when the contractual rights to cash flows end or substantially all the risks and rewards of ownership are transferred to another party. Financial liabilities are derecognized when the contractual obligation is settled or legally revoked.
Net gains and losses from financial instruments essentially include changes of write-downs and foreign currency valuation effects recognized in net profit on operating activities and interest income and expenses recognized in the financial result.
For information on risk management please refer to Note 21 and/or to the risk reporting in the Group Management Report.
