43. Associates - Annual Report PKO BP 2023

Accounting policies

Valuation and classification of other financial assets into categories is carried out in accordance with the principles for determining the business model and assessing the characteristics of contractual cash flows referred to in note “General accounting policies for financial instruments”.

Other financial assets recognized in this item are stated at amounts due, comprising also potential interest on such assets, taking into consideration provisions for expected credit losses.

Other non-financial assets are measured in accordance with the valuation principles applicable to specific categories of assets recognized in this item.

Inventories are measured at the lower of cost and net realisable value.

Financial information

For more information on other financial assets in terms of credit risk exposure, see note “Credit risk – financial information”.

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OTHER ASSETS	31.12.2023	31.12.2022*
Other financial assets	1,474	1,850
Settlements in respect of card transactions	480	620
Settlement of financial instruments	143	134
Receivables in respect of cash settlements	408	340
Receivables and settlements in respect of trading in securities	28	24
Sale of foreign currencies	30	–
Trade receivables	273	213
Other	112	401
Other non-financial assets	942	935
Inventories	206	287
Assets for sale	183	126
Prepayments and deferred costs	163	131
VAT receivable	33	45
Receivables from the State Budget in respect of flat-rate income tax	–	12
Receivables from settlements with the National Clearing House	–	1
Receivables from customers for whom the agreements have been legally declared invalid in respect of the principal originally disbursed to these customers.	217	186
Other	140	147
Total	2,416	2,785

* The comparative figures for 2022 have been adjusted by PLN 19 million for the implementation of IFRS 17 "Insurance Contracts" (see note „IFRS 17 Insurance Contracts”).

Other non-financial assets

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OTHER NON-FINANCIAL ASSETS	31.12.2023	31.12.2022
Gross amount	1,300	1,274
Impairment losses	(358)	(337)
Net carrying amount	942	937

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Other non-financial assets – CHANGES IN IMPAIRMENT LOSSES	2023	2022
As at the beginning of the period	(337)	(330)
Recognized during the period	(74)	(66)
Derecognition of assets and settlements	53	36
Reversed during the period	20	27
Other	(20)	(4)
As at the end of the period	(358)	(337)

Management of foreclosed collateral – item “assets for sale”

Foreclosed collaterals as a result of restructuring or debt collection activities are either designated for sale or used by the Group for internal purposes. Details of the foreclosed assets are analysed in order to determine whether they can be used by the Group for internal purposes. All of the assets foreclosed as a result of restructuring and debt collection activities in the years ended 31 December 2023 and 31 December 2022, respectively, were designated as held for sale. Activities undertaken by the Group are aimed at selling assets as soon as possible. The primary procedure for the sale of assets is an open tender. In justified cases, the sale follows a different procedure depending on the specifics of the sold property.