|Amendments to IAS 1 and IAS 8: Definition of the term ‘material’ (1.01.2020/ 29.11.2019)
||The amendments standardize and clarify the definition of ‘material’ and contain guidelines to increase the consistency of application of this concept in the IFRS.
The Group makes assessments of the materiality of disclosures in accordance with the requirements of IAS 1 on an ongoing basis, and based on these assessments, makes appropriate changes in the presentation of data in the consolidated financial statements.
|Amendments to IFRS 9, IAS 39 and IFRS 7 – IBOR reform (1.01.2020/ 15.01.2020)
||The amendments introduce certain temporary, narrow departures from the requirements of prospective verification of the effectiveness of hedging relations set out in IAS 39 and IFRS 9. The amendments allow prospective testing of hedging relationships without taking into account the effects of the future implementation of the IBOR reform.
The Group took amendments into account in the prospective testing of hedging relationships.
As part of the established hedging relationships, the Capital Group identifies the following interest rate reference ratios: WIBOR, EURIBOR, LIBOR CHF, LIBOR USD. As at the reporting date, these benchmarks are quoted daily and are available for use and the resulting cash flows are normally exchanged with counterparties.
In the case of WIBOR and EURIBOR, the Group currently does not identify any uncertainty regarding the timing or amounts of cash flows resulting from the IBOR reform. For LIBOR CHF and LIBOR USD, the established hedging relationships exceed the announced discontinuation dates for both ratios, i.e. December 31, 2021 for CHF LIBOR and June 20, 2023 for USD LIBOR. The Capital Group expects that these ratios will be replaced by new benchmarks: LIBOR CHF by SARON and LIBOR USD by SOFR.
List of hedging relationships and the nominal amounts of their designated hedging instruments that may be affected by the IBOR reform:
CIRS CHF / PLN (CHF 25 million based on CHF LIBOR) – Hedging the volatility of cash flows of floating-rate loans in CHF, resulting from the risk of changes in interest rates and currency risk, and hedging of the volatility of cash flows of term deposits negotiated in PLN / bank products of regular PLN savings resulting from the risk of changes in interest rates, using CIRS transaction
IRS USD (USD 81 million based on USD LIBOR) – Hedge of fair value volatility of a fixed-rate convertible currency, measured at fair value through other comprehensive income, resulting from the risk of changes in interest rates, using IRS transactions.
|Amendments to IFRS 3 Business combinations
|The amendments narrow down and clarify the definition of a venture. They also allow for a simplified assessment of whether a set of assets and activities is a group of assets and not a venture. A prospective approach will apply to these amendments.
The Group will apply these amendments, if relevant.