Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Allianz Annual Report 2013

Annual Report 2013    Allianz Group142 ately in other comprehensive income (OCI). While all remeasure- ments and experience adjustments need to be recognized in OCI, service and interest costs are recognized in the profit or loss account. The long-term return on plan assets is calculated using the same interest rate used to discount the defined benefit obligation, i.e. high- quality corporate bonds at the end of the reporting period. Please refer to note 3, where the processes and controls for ensuring an appropriate use of estimates and assumptions are explained. Share-based compensation plans The share-based compensation plans of the ­Allianz Group are classi- fied as either equity-settled or cash-settled plans. Equity-settled plans are measured at fair value on the grant date and recognized as an expense, with a corresponding increase to shareholders’ equity, over the vesting period. Equity-settled plans include a best estimate of the number of equity instruments that are expected to vest in determiningtheamountofexpensetoberecognized.Forcash-settled plans, the ­Allianz Group accrues the fair value of the award as a com- pensation expense over the vesting period. Upon vesting, any change in the fair value of any unexercised awards is also recognized as a compensation expense. Restructuring provisions Restructuring provisions are recognized when programs materially change the scope of business performed by an operating entity or business unit or the manner in which business is conducted and when a detailed formal plan has been announced. Please refer to note 3, where the processes and controls for ensur- ing an appropriate use of estimates and assumptions are explained. Financial liabilities for puttable equity instruments Financial liabilities for puttable equity instruments primarily in- clude the non-controlling interests in shareholders’ equity of con- trolled mutual funds. These interests qualify as a financial liability of the ­Allianz Group, as they give the holder the right to put the instru- ment back to the ­Allianz Group for cash or another financial asset (puttable instrument). These liabilities are generally required to be recorded at the redemption amount with changes recognized in income. CERTIFICATED LIABILITIES AND SUBORDINATED LIABILITIES Certificated liabilities and subordinated liabilities are subsequently measured at amortized cost, using the effective interest method to amortize the premium or discount to the redemption value over the life of the liability. EQUITY Issued capital represents the mathematical per share value received from the issuance of shares. Capital reserves represent the premium, or additional paid-in capital, received from the issuance of shares. Retained earnings comprise the net income of the current year, not yet distributed earnings of prior years and treasury shares as well as any amounts directly recognized in equity according to IFRS. Trea- sury shares are deducted from shareholders’ equity. No gain or loss is recognized on the sale, issuance, acquisition or cancellation of these shares. Any consideration paid or received is recorded directly in shareholders’ equity. Unrealized gains and losses (net) include unrealized gains and losses from available-for-sale investments and derivative financial instruments that meet the criteria for cash hedge accounting or hedges of a net investment in a foreign entity. Please refer to the above sections for foreign currency, where foreign currency changes that are recognized in other comprehensive income are explained. Non-controlling interests represent equity in subsidiaries, not attributable directly or indirectly, to ­Allianz as parent. PREMIUMS Premiums for short-duration insurance contracts are recognized as revenues over the period of the contract in proportion to the amount of insurance protection provided. Unearned premiums are calculated separately for each individual policy to cover the unexpired portion of written premiums. Premiums for long-duration insurance contracts are recognized as earned when due. Long-duration insurance contracts are contracts that are not cancelable by the insurance company, guaranteed to be renewable and expected to remain in force over an extended period of time. Revenues for universal life-type and investment contracts repre- sent charges assessed against the policyholders’ account balances for the front-end loads, net of the change in unearned revenue liabil- ity, cost of insurance, surrenders and policy administration, and are included within premiums earned (net). Premiums ceded for reinsurance are deducted from premiums earned. INTEREST AND SIMILAR INCOME and interest expenses Interest income and interest expenses are recognized on an accrual basis.Interestincomeisrecognizedusingtheeffectiveinterestmethod. This line item also includes dividends from available-for-sale equity securities and income from investments in associates and joint ven- tures. Dividends are recognized in income when the right to receive the dividend is established. Share of earnings from investments in associates and joint ventures represents the share of net income from entities accounted for using the equity method.

Pages Overview