37. Error corrections in accordance with IAS 8

Consolidation of controlled investment funds

Among other things, the consolidation method for investment funds controlled by UNIQA was subjected to a detailed analysis as part of the migration of UNIQA’s accounting to a new IT system, resulting in a need for procedural adjustments. Up until now, the investment fund certificates were derecognised in the consolidated reporting as IFRS adjustment items and replaced proportionally by the individual securities. Yet this resulted in an incorrect distinction between consolidation measures and adjustment items. Therefore, in order to guarantee a correct statement, the treatment of controlled investment funds was adjusted to the subsidiaries’ consolidation methods. This way any future intra-Group balances and transactions along with earnings and expenses from intra-Group transactions will be eliminated as consolidation measures. The values previously reported under other liabilities to fund owners outside the Group will from now on be presented under the item “Non-controlling interests” in equity. In addition to this, the deferred taxes and deferred profit participation existing on outside basis differences in this context were derecognised.

Deferred taxes and deferred profit participation

UNIQA operates on the Austrian market as a composite insurance company and is subject to the Austrian Profit-Sharing Regulation in the Life Insurance business line. The profit or loss based on local calculation principles is used as the basis for calculating the profit participation. A deferred profit participation is recognised for differences between the local valuation and the valuation in accordance with IFRS. Shifts occurred through the existing P&L-based approach to changes in the distribution of costs to the business lines and with transfers of capital investments between the business lines when determining the deferred profit participation and deferred taxes. As such the deferrals posted no longer corresponded with the underlying social capital provisions and capital investments. These shifts were detected during the course of system migrations and the P&L-based approach was amended to a balance sheet-oriented approach.

Percentage of deferred profit participation

In addition, the deferred profit participation in the life insurance business line in Austria was previously calculated at 85 per cent on the basis of the gross amount (i.e. before deferred taxes). Corresponding to the determination of the profit participation, the calculation of the deferred profit participation was corrected on the basis of the net amount (i.e. after deferred taxes).

Pro rata interest

In addition, accrued interest is corrected on the assets and liabilities side of the balance sheet. Accrued interest is now reported under the underlying receivables or liabilities. The pro rata interest attributable to investments was previously reported under the item “Receivables including insurance receivables” under the heading “Interest and rent”. These have been reclassified to the item “Other investments”. On the liabilities side, accrued interest, which was previously reported under “Obligations for interest payments” under the item “Liabilities and other items classified as liabilities”, was reclassified as “Subordinated liabilities”.