Notes to the consolidated balance sheet: assets
1. Banks
2019 | 2018 | |
Banks | 64,626 | 54,642 |
Balance at December 31 | 64,626 | 54,642 |
The cash on bank accounts can be freely disposed of.
2. Current accounts with State funds and other programs (assets)
2019 | 2018 | |
Current account MASSIF | - | 264 |
Current account EIB | 230 | 230 |
Current account Building Prospects | - | - |
Current account Access to Energy Fund | 568 | - |
Current account Land Use Facility | 396 | - |
Balance at December 31 | 1,194 | 494 |
Current accounts can be freely disposed of.
3. Short-term deposits
2019 | 2018 | |
Collateral delivered (related to derivative financial instruments) | 95,176 | 66,531 |
Dutch central bank | 350,122 | 324,615 |
Mandatory reserve deposit with Dutch central bank | 1,410 | 489 |
Call Deposits | - | - |
Short term deposits measured at AC | 446,708 | 391,635 |
Commercial paper | 796,725 | 590,350 |
Money market funds | 130,044 | 165,866 |
Short term deposits measured at FVPL | 926,769 | 756,216 |
Balance at December 31 | 1,373,477 | 1,147,851 |
Mandatory reserve deposits are not available for use in FMO’s day-to-day operations.
Fair value gain on money market funds and commercial paper portfolio recorded in the profit and loss amounts to €32 (2018: €93 loss). The amount attributable to change in credit risk is limited.
Short term deposits generally have a maturity of less than three months however a small portfolio of commercial paper has a longer maturity. Commercial paper with maturity of more than three months amounts to €0 (2018: €297,884).
4. Interest-bearing securities
This portfolio contains marketable bonds with fixed interest rates. All interest-bearing securities (credit quality of AA+ or higher) are classified as Stage 1. An amount of €68 (2018: €64) is calculated for the ECL of both asset classes as per December 31, 2019.
|
| |
Bonds (listed) | 350,237 | 402,380 |
Balance at December 31 | 350,237 | 402,380 |
All interest-bearing securities are classified as amortized cost. The movements can be summarized as follows:
|
| |
Balance at January 1 | 402,380 | 361,298 |
Amortization premiums/discounts | 33 | -802 |
Purchases | - | 54,826 |
Redemptions | -54,505 | -18,976 |
Changes in ECL allowances | - | -18 |
Changes in accrued income | -231 | 95 |
Exchange rate differences | 2,560 | 5,957 |
Balance at December 31 | 350,237 | 402,380 |
5. Derivative financial instruments and hedge accounting
Use of derivatives and hedge accounting
Derivatives are held for both economic hedging purposes and for hedge accounting. FMO uses derivatives for hedging purposes in the management of its asset and liability portfolios and structural risk positions. These risks are hedged with interest rate swaps, cross currency swaps and cross currency interest rate swaps. The objective of hedging is to enter into positions with an opposite risk profile to an identified exposure to reduce that exposure. The objective of FMO hedging activities is to optimize the overall cost to the bank of accessing debt capital markets and to mitigate the risk which would otherwise arise from structural imbalances in the duration and other profiles of its assets and liabilities. The accounting treatment of hedge transactions varies according to the nature of the instrument hedged and whether the hedge qualifies under the IFRS hedge accounting rules.
Derivatives that qualify for hedge accounting under IFRS are classified and accounted for in accordance with the nature of the instrument hedged and the type of IFRS hedge model that is applicable. FMO applies fair value hedge accounting to the funding portfolio with interest rate swaps as hedging instruments. To qualify for hedge accounting under IFRS, strict criteria must be met. Certain hedges that are economically effective from a risk management perspective do not qualify for hedge accounting under IFRS. The fair value changes of derivatives relating to such non-qualifying hedges are taken to the statement of profit or loss and recorded under the line results from financial transactions. If hedge accounting is applied under IFRS, it is possible that during the hedge a hedge relationship no longer qualifies for hedge accounting and hedge accounting cannot be continued, even if the hedge remains economically effective. As a result, the volatility arising from undertaking economic hedging in the statement of profit or loss may be higher than would be expected from an economic point of view. With respect to exchange rate and interest rate derivative contracts, the notional or contractual amount of these instruments is indicative of the nominal value of transactions outstanding at the balance sheet date; how-ever they do not represent amounts at risk.
For the year ended December 31, 2019, FMO recognized net gain for €0.3 million for hedge ineffectiveness on the micro fair value hedges (2018: €4.1 million net gain). The profit on the hedging instruments amounts to €46.7 million (2018: €10.2 million gain). The loss on hedged items attributable to the hedged risk amounts to €46.4 million (2018: €6.1 million loss). The result is mainly attributed to change of spreads between 3-month reference rates and Overnight-Index-Swap rates (OIS).
Micro fair value hedge accounting
FMO only applies micro-hedging strategies, hence at hedge inception the test is conducted. FMO’s micro fair value hedges consist of interest rate swaps that are used to protect against changes in the fair value of fixed-rate instruments due to movements in market interest rates. Gains and losses on derivatives designated under fair value hedge accounting and hedged items are recognized in the statement of profit or loss.
The amounts relating to derivatives designated as fair value hedging instruments and hedge ineffectiveness were as follows:
Carrying amount | ||||||
December 31, 2019 | Notional amount | Assets | Liabilities | Change in fair value used for calculating hedge ineffectiveness | Ineffectiveness recorded in profit or loss | Line item in P&L that includes hedge ineffectiveness |
Interest rate swaps | 3,653,162 | 144,061 | 12,724 | 46,692 | 317 | Results from financial transactions |
December 31, 2018 | ||||||
Interest rate swaps | 2,633,664 | 75,221 | 6,965 | 10,210 | 4,057 | Results from financial transactions |
At December 31, 2019, FMO held the following interest rate swaps as hedging instruments in fair value hedges of interest rate risk.
Hedge of debentures and notes December 31, 2019 | Maturity | ||||
Risk category (interest rate) | Less than 1 month | 1-3 months | 3 months - 1 year | 1-5 years | more than 5 years |
Nominal amount (in millions of euro) | - | - | 675.0 | 2,245.4 | 732.7 |
Average fixed interest rate (%) | - | - | 0.5 | 1.3 | 2.6 |
Hedge of debentures and notes December 31, 2018 | |||||
Nominal amount (in millions of euro) | - | 5.0 | 136.0 | 1,961.0 | 560.0 |
Average fixed interest rate (%) | - | 1.8 | 2.8 | 1.7 | 3.7 |
The amounts relating to items designated as hedged items were as follows:
December 31, 2019 | Carrying amount of the hedged item | Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item | |||
Balance sheet line item | Liabilities | Assets | Liabilities | Change in fair value used for calculating hedge ineffectiveness | Accumulated amount remaining in the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and losses |
Debentures and notes | 3,773,180 | - | - | -46,375 | - |
December 31, 2018 | |||||
Debentures and notes | 2,697,095 | - | 3 | -6,153 | - |
Derivatives other than hedge accounting instruments
The following table summarizes the notional amounts and the fair values of the ‘derivatives other than hedge accounting instruments’. These derivatives are held to reduce interest rate risks and currency risks but do not meet the specified criteria to apply hedge accounting at reporting period. The following table also includes derivatives related to the asset portfolio.
December 31, 2019 | Notional amounts | Fair value assets | Fair value liabilities | |
Derivatives other than hedge accounting instruments: | ||||
ˑ | Currency swaps | 324,015 | 428 | 869 |
ˑ | Interest rate swaps | 1,745,060 | 34,159 | 44,255 |
ˑ | Cross-currency interest rate swaps | 3,061,803 | 116,801 | 197,625 |
Subtotal | 5,130,878 | 151,388 | 242,749 | |
Embedded derivatives related to asset portfolio | - | 5,789 | 1,698 | |
Total derivative assets (/liabilities) other than hedge accounting instruments | 5,130,878 | 157,177 | 244,447 |
December 31, 2018 | Notional amounts | Fair value assets | Fair value liabilities | |
Derivatives other than hedge accounting instruments: | ||||
ˑ | Currency swaps | 44,638 | -166 | 1,794 |
ˑ | Interest rate swaps | 700,112 | 12,261 | 6,122 |
ˑ | Cross-currency interest rate swaps | 3,353,655 | 155,883 | 202,293 |
Subtotal | 4,098,405 | 167,978 | 210,209 | |
Embedded derivatives related to asset portfolio | - | 4,624 | - | |
Total derivative assets (/liabilities) other than hedge accounting instruments | 4,098,405 | 172,602 | 210,209 |
6. Loans to the private sector
These loans to the private sector include:
Loans to the private sector in developing countries are for the account and risk of FMO;
Loans in developing countries which are individually guaranteed by the Dutch State for 80% to 95% or other financial guarantors. Any losses will be compensated by the guarantors up to the guaranteed amount. Refer to our Credit Risk Management Chapter for details of these guarantees received.
The movements of these loans can be summarized as follows:
Loans measured at AC | Loans measured at FVPL |
| |
Balance at January 1, 2019 | 4,240,526 | 685,799 | 4,926,325 |
Disbursements | 1,033,835 | 145,749 | 1,179,584 |
Conversion from loan to equity | -8,102 | -11,110 | -19,212 |
Repayments | -757,323 | -113,463 | -870,786 |
Write-offs | -7,640 | -10,498 | -18,138 |
Derecognized and/or restructured loans | 35,513 | 612 | 36,125 |
Changes in amortizable fees | -4,618 | -44 | -4,662 |
Changes in fair value | - | -14,620 | -14,620 |
Changes in accrued income | -103 | 2,888 | 2,785 |
Exchange rate differences | 41,962 | 11,200 | 53,162 |
Balance at December 31, 2019 | 4,574,050 | 696,513 | 5,270,563 |
Impairment | -239,941 | - | -239,941 |
Net balance at December 31, 2019 | 4,334,109 | 696,513 | 5,030,622 |
Loans measured at AC | Loans measured at FVPL |
| |
Balance at January 1, 2018 | 3,777,197 | 608,382 | 4,385,579 |
Disbursements | 1,285,450 | 88,113 | 1,373,563 |
Conversion from loan to equity | - | -4,814 | -4,814 |
Repayments | -854,289 | -81,345 | -935,634 |
Write-offs | -18,308 | - | -18,308 |
Derecognized and/or restructured loans | -56,520 | 56,520 | - |
Changes in amortizable fees | -2,762 | 105 | -2,657 |
Changes in fair value | - | -9,828 | -9,828 |
Changes in accrued income | 5,840 | 4,935 | 10,775 |
Exchange rate differences | 103,918 | 23,731 | 127,649 |
Balance at December 31, 2018 | 4,240,526 | 685,799 | 4,926,325 |
Impairment | -155,504 | - | -155,504 |
Net balance at December 31, 2018 | 4,085,022 | 685,799 | 4,770,821 |
The contractual amount of assets that were written off during the period are still subject to enforcement activity. Recoveries from written off loans amount to €1,846 (2018:€3,613)
The following tables summarize the loans segmented by sector and areas of geography.
Loans segmented by sector | 2019 | |||||
Stage 1 | Stage 2 | Stage 3 | Fair value | Total 2019 |
| |
Financial Institutions | 1,751,417 | 131,199 | 4,007 | 270,202 | 2,156,825 | 2,013,628 |
Energy | 1,109,218 | 261,229 | 66,544 | 137,241 | 1,574,232 | 1,453,960 |
Agribusiness | 467,155 | 31,837 | 43,047 | 131,712 | 673,751 | 572,404 |
Multi-Sector Fund Investments | 26,275 | - | - | 42,610 | 68,885 | 62,250 |
Infrastructure, Manufacturing and Services | 279,503 | 77,573 | 85,105 | 114,748 | 556,929 | 668,579 |
Net balance at December 31 | 3,633,568 | 501,838 | 198,703 | 696,513 | 5,030,622 | 4,770,821 |
Loans segmented by geographical area | 2019 | |||||
Stage 1 | Stage 2 | Stage 3 | Fair value | Total 2019 |
| |
Africa | 1,049,620 | 130,106 | 17,647 | 139,813 | 1,337,186 | 1,197,322 |
Asia | 769,022 | 49,262 | 15,918 | 194,601 | 1,028,803 | 991,434 |
Latin America & the Carribbean | 912,293 | 139,017 | 112,230 | 95,259 | 1,258,799 | 1,256,423 |
Europe & Central Asia | 824,248 | 134,888 | 52,908 | 161,532 | 1,173,576 | 1,094,037 |
Non - region specific | 78,385 | 48,565 | - | 105,308 | 232,258 | 231,605 |
Net balance at December 31 | 3,633,568 | 501,838 | 198,703 | 696,513 | 5,030,622 | 4,770,821 |
|
| |||||
Gross amount of loans to companies in which FMO has equity investments | 187,944 | 91,993 | ||||
Gross amount of subordinated loans | 273,685 | 300,356 | ||||
Gross amount of non-performing loans (EBA definition) | 524,104 | 416,836 | ||||
Gross amount of loans covered by guarantees received | 485,756 | 520,279 |
For definition and more details on non-performing loans, reference is made to section 'Credit Risk' within the Risk Management chapter.
The movements in the gross amounts and ECL allowances for loans to the private sector at AC are as follows:
Changes in Loans to the private sector at AC in 2019 | Stage 1 | Stage 2 | Stage 3 | Total | ||||
Gross amount | ECL allowance | Gross amount | ECL allowance | Gross amount | ECL allowance | Gross amount | ECL allowance | |
At December 31, 2018 | 3,519,157 | -30,582 | 442,675 | -16,765 | 278,694 | -108,157 | 4,240,526 | -155,504 |
Additions | 964,726 | -10,171 | 57,879 | -5,534 | 11,232 | -1,166 | 1,033,837 | -16,871 |
Exposure derecognised or matured/lapsed (excluding write offs) | -616,324 | 1,606 | -94,149 | 408 | -47,850 | 6,874 | -758,323 | 8,888 |
Transfers to Stage 1 | 41,421 | -3,933 | -41,421 | 3,933 | - | - | - | - |
Transfers to Stage 2 | -205,110 | 2,401 | 205,110 | -2,401 | - | - | - | - |
Transfers to Stage 3 | -69,765 | 1,042 | -50,486 | 2,858 | 120,251 | -3,900 | - | - |
Modifications of financial assets (including derecognition) | -597 | - | 159 | - | 27,849 | -11,938 | 27,411 | -11,938 |
Changes in risk profile not related to transfers | 7,570 | -7,539 | - | -69,655 | - | -69,624 | ||
Amounts written off | - | - | - | - | -7,640 | 7,640 | -7,640 | 7,640 |
Changes in amortizable fees | -5,441 | - | 31 | - | 792 | - | -4,618 | - |
Changes in accrued income | 4,753 | - | 4,619 | - | -8,476 | - | 896 | - |
Foreign exchange adjustments | 33,273 | -457 | 2,648 | -187 | 6,040 | -1,888 | 41,961 | -2,532 |
At December 31, 2019 | 3,666,093 | -32,524 | 527,065 | -25,227 | 380,892 | -182,190 | 4,574,050 | -239,941 |
Changes in Loans to the private sector at AC in 2018 | Stage 1 | Stage 2 | Stage 3 | Total | ||||
Gross amount | ECL allowance | Gross amount | ECL allowance | Gross amount | ECL allowance | Gross amount | ECL allowance | |
At January 1, 2018 | 3,112,742 | -29,821 | 464,729 | -18,910 | 199,726 | -102,052 | 3,777,197 | -150,783 |
Additions | 1,217,916 | -11,624 | 55,136 | -3,669 | 12,398 | -296 | 1,285,450 | -15,589 |
Exposure derecognised or matured/lapsed (excluding write offs) | -706,066 | 5,954 | -115,451 | 2,264 | -32,772 | 9,566 | -854,289 | 17,784 |
Transfers to Stage 1 | 102,937 | -4,921 | -102,937 | 4,921 | - | - | - | - |
Transfers to Stage 2 | -209,885 | 2,071 | 220,871 | -5,107 | -10,986 | 3,036 | - | - |
Transfers to Stage 3 | -58,237 | 1,931 | -84,449 | 4,523 | 142,686 | -6,454 | - | - |
Modifications of financial assets (including derecognition) | -26,161 | 695 | - | - | -30,359 | 5,547 | -56,520 | 6,242 |
Changes in risk profile not related to transfers | - | 5,824 | - | -72 | - | -33,047 | - | -27,295 |
Amounts written off | - | - | - | - | -18,308 | 18,308 | -18,308 | 18,308 |
Changes in amortizable fees | -3,528 | - | 730 | - | 36 | - | -2,762 | - |
Changes in accrued income | 2,464 | - | -4,588 | - | 7,964 | - | 5,840 | - |
Foreign exchange adjustments | 86,975 | -691 | 8,634 | -715 | 8,309 | -2,765 | 103,918 | -4,171 |
At December 31, 2018 | 3,519,157 | -30,582 | 442,675 | -16,765 | 278,694 | -108,157 | 4,240,526 | -155,504 |
Total impairments on loans in the consolidated profit and loss account | ||
|
| |
Additions and reversals loans FMO portfolio | -96,121 | -31,794 |
Guaranteed part additions and reversals loans guaranteed by the State | 3,237 | 628 |
Recoveries (writen - off loans)1 | 1,846 | 3,613 |
Balance at December 31 | -91,038 | -27,553 |
- 1 Recoveries from written-off loans have been reclassified from 'Other operating income'. Comparative amount of €3,613 has been adjusted as per December 31, 2018.
7. ECL allowances - assessment
According to IFRS 9, FMO calculates ECL allowances for Interest bearing Securities, Loans at private sector at AC (including off balance loan commitments) and Guarantees Given to customers. The movement in ECL allowances for each of these items is presented in their relevant notes.
In order to demonstrate the sensitivity of the SICR criteria, the tables below present the distribution of stage 2 impairments by the criteria that triggered the migration to stage 2 versus stage 2 impairments triggered by the 30 day past due backstop.
December 31, 2019 | ||||
ECL allowance Stage 2 - Trigger assessment | Loans to private Sector | Guarantees | Loan Commitments | Total |
More than 30 days past due | -43 | - | -853 | -896 |
Forbearance | -5,646 | - | -525 | -6,171 |
Deterioration in credit risk rating | -19,538 | -483 | -1,709 | -21,730 |
Total | -25,227 | -483 | -3,087 | -28,797 |
December 31, 2018 | ||||
ECL allowance Stage 2 - Trigger assessment | Loans to private Sector | Guarantees | Loan Commitments | Total |
More than 30 days past due | -203 | - | - | -203 |
Forbearance | -7,519 | - | - | -7,519 |
Deterioration in credit risk rating | -9,043 | -297 | -435 | -9,775 |
Total | -16,765 | -297 | -435 | -17,497 |
The table show the values of the IMF GDP forecasts used in each of the economic scenarios for the ECL calculations for 2019 and 2020. The upside and downside scenario calculations are derived from the base case scenario, adjusted based on an indicator of public debt to GDP in emerging markets.
IMF GDP % Growth Forecasts | 2019 | 2020 |
Turkey | 0.4 | 3.0 |
India | 7.4 | 7.0 |
Georgia | 4.8 | 4.8 |
Argentina | -1.6 | -1.3 |
Nigeria | 2.3 | 2.5 |
Uganda | 6.1 | 6.2 |
Bangladesh | 7.1 | 7.4 |
Ghana | 7.6 | 5.6 |
Armenia | 4.8 | 4.8 |
Costa Rica | 3.3 | 2.5 |
The following tables outline the impact of multiple scenarios on the ECL allowance
December 31, 2019 | Total unweighted amount per ECL scenario | Probability | Loans to the private Sector | Guarantees | Bonds and Cash | Total |
ECL Scenario: | ||||||
Upside | 222,318 | 5% | 11,035 | 77 | 4 | 11,116 |
Base case | 248,376 | 50% | 123,107 | 1,046 | 35 | 124,188 |
Downside | 288,068 | 45% | 128,199 | 1,401 | 31 | 129,631 |
Total | 262,341 | 2,524 | 70 | 264,935 |
December 31, 2018 | Total unweighted amount per ECL scenario | Probability | Loans to the private Sector | Guarantees | Bonds and Cash | Total |
ECL Scenario: | ||||||
Upside | 154,984 | 5% | 7,612 | 136 | 2 | 7,750 |
Base case | 156,839 | 50% | 77,004 | 1,393 | 22 | 78,419 |
Downside | 170,877 | 45% | 75,373 | 1,480 | 41 | 76,894 |
Total | 159,989 | 3,009 | 65 | 163,063 |
Refer to our 'Accounting policies' chapter on macro-economic scenarios on PD estimates.
8. Equity investments
These equity investments in developing countries are for FMO’s account and risk. The movements in fair value of the equity investments are summarized in the following table. Equity investments of FMO are measured at FVPL or measured at FVOCI.
Equity measured at FVOCI | Equity measured at FVPL | 2019 | |
Net balance at January 1, 2019 | 77,553 | 1,504,427 | 1,581,980 |
Purchases and contributions | 27,223 | 269,370 | 296,593 |
Conversion of loans to equity | - | 11,312 | 11,312 |
Return of Capital (including sales) | - | -89,173 | -89,173 |
Impairments | - | - | - |
Write-offs | - | - | - |
Changes in fair value | 18,145 | 60,708 | 78,853 |
Net balance at December 31, 2019 | 122,921 | 1,756,644 | 1,879,565 |
Equity measured at FVOCI | Equity measured at FVPL |
| |
Net balance at January 1, 2018 | 77,798 | 1,425,465 | 1,503,263 |
Purchases and contributions | - | 296,090 | 296,090 |
Conversion of loans to equity | - | 4,814 | 4,814 |
Return of Capital (including sales) | - | -167,300 | -167,300 |
Impairments | - | - | - |
Write-offs | - | -4,268 | -4,268 |
Changes in fair value | -245 | -50,374 | -50,619 |
Net balance at December 31, 2018 | 77,553 | 1,504,427 | 1,581,980 |
The following table summarizes the equity investments segmented by sector:
|
| |
Financial Institutions | 480,936 | 378,075 |
Energy | 265,709 | 216,357 |
Agribusiness | 122,670 | 127,913 |
Multi-Sector Fund Investments | 678,424 | 617,725 |
Infrastructure, Manufacturing and Services | 331,826 | 241,910 |
Net balance at December 31 | 1,879,565 | 1,581,980 |
FMO has designated three investments as shown in the following table as equity investments at FVOCI. The FVOCI designation was made because the investments are expected to be held for long-term strategic purposes.
Fair value at December 31, 2019 | Dividend income recognized during 2019 | Fair value at December 31, 2018 | Dividend income recognized during 2018 | ||
TCX Investment Company | 29,276 | - | 23,451 | - | |
The Currency Exchanged Fund N.V. | 83,050 | - | 43,551 | - | |
Seed Capital | 10,595 | - | 10,551 | - | |
Balance at December 31 | 122,921 | - | 77,553 | - |
None of these strategic investments were disposed of during 2019, and there were no transfers of any cumulative gain or loss within equity relating to these investments. The change in fair value for The Currency Exchanged Fund N.V. is mainly driven by capital increase.
9. Investments in associates
The movements in the carrying amounts of the associates are summarized in the following table.
2019 | 2018 | |
Net balance at January 1 | 215,539 | 207,482 |
Purchases and contributions | 58,075 | 3,251 |
Conversion from loans to equity | - | - |
Return of capital (including sales) | -2,840 | -3,330 |
Share in net results | 11,077 | -1,802 |
Exchange rate differences | 4,016 | 9,938 |
Net balance at December 31 | 285,867 | 215,539 |
All investments in associates from FMO are measured based on the equity accounting method.
Arise B.V. is a private limited liability company incorporated in the Netherlands whose statutory seat is registered at Croeselaan 18, 3521 CB Utrecht, the Netherlands and registered in the Dutch commercial register under number 64756394. FMO’s share and voting rights in Arise B.V. is 27%.
In 2016 FMO signed an agreement to set up an investment vehicle, Arise B.V., together with Norfund and Rabobank. This investment vehicle is set up to invest in African financial institutions. FMO's initial commitment amounts to US$211 million. As of 31 December 2019 our remaining commitment towards Arise B.V. amounts to US$23 million.
The following table summarizes the associates segmented by sector.
2019 | 2018 | |
Financial Institutions | 241,354 | 191,862 |
Energy | 37,789 | 14,499 |
Infrastructure, Manufacturing and Services | - | 1,528 |
Multi-Sector Fund Investments | 6,724 | 7,650 |
Net balance at December 31 | 285,867 | 215,539 |
The following table summarizes FMO’s share in the total assets, liabilities, total income and total net profit/loss of the associates.
Arise B.V. | Other associates | |
Total assets | 226,712 | 104,958 |
Total liabilities | 3,518 | 56,950 |
Total income | 124 | 12,568 |
Total profit/loss | 14,282 | -4,522 |
10. Other receivables
2019 | 2018 | |
Receivables related to equity disposals | 7,508 | 6,224 |
Taxes and social premiums | 1,037 | 1,006 |
To be declared on State guaranteed loans | 3,264 | 894 |
Transaction fee receivables and prepayments | 14,015 | 12,473 |
Balance at December 31 | 25,824 | 20,597 |
11. Property, plant and equipment
Property, plant and equipment (PP&E) includes tangible assets which are used by FMO. These assets include buildings, office equipment and vehicles which are rented by FMO from third parties. These leases have been recognized on the balance sheet following the implementation of IFRS 16 as per January 1, 2019
Furthermore, PPE includes furniture owned by FMO and expenses related to leasehold improvements.
In prior reporting years, intangible assets were also recorded under this line item, however as per 2019 intangibles are now presented on a separate line item. Comparatives as per December 31, 2018 have been restated. Refer to note 'Intangible assets'.
Furniture | Leasehold improvement | Right use-of-assets | Total | |
Cost at December 31, 2018 | 10,380 | 218 | - | 10,598 |
Accumulated depreciation at December 31, 2018 | -8,820 | -101 | - | -8,921 |
Balance at December 31, 2018 | 1,560 | 117 | - | 1,677 |
Adjustments from adoption of IFRS 16 | - | - | 15,353 | 15,353 |
Cost at January 1, 2019 | 1,560 | 117 | 15,353 | 17,030 |
Investments | 33 | 3,965 | 11,364 | 15,362 |
Depreciation | -475 | -81 | -3,293 | -3,849 |
Divestments cost | -760 | -208 | - | -968 |
Accumulated depreciation on divestments | 584 | 130 | - | 714 |
Balance at December 31, 2019 | 942 | 3,923 | 23,424 | 28,289 |
Cost at December 31, 2019 | 9,653 | 3,972 | 26,717 | 40,342 |
Accumulated depreciation at December 31, 2019 | -8,711 | -49 | -3,293 | -12,053 |
Balance at December 31, 2019 | 942 | 3,923 | 23,424 | 28,289 |
Right-of-use assets consists of operational leases and include building, vehicles and office equipment. Following the implementation of IFRS 16, these leases have been recognized on the balance sheet as per January 1, 2019. Refer to the 'Accounting policies' section for more information and transition disclosure.
Buildings | Office equipment | Vehicles | Total right-of-use assets | Lease liabilities | |
January 1, 2019 | 13,121 | 466 | 1,766 | 15,353 | 15,353 |
Additions | 10,285 | 268 | 811 | 11,364 | 11,364 |
Depreciation | -2,346 | -132 | -815 | -3,293 | - |
Finance costs | - | - | - | - | 185 |
Payments | - | - | - | - | -3,393 |
December 31, 2019 | 21,060 | 602 | 1,762 | 23,424 | 23,509 |
The following table presents the maturity breakdown of the leases
< 1 year | 1-5 years | >5 years | Total | |
Buidlings | 2,316 | 9,305 | 9,516 | 21,137 |
Office Equipment | 125 | 396 | 82 | 603 |
Vehicles | 739 | 1,030 | 1,769 | |
Total | 3,180 | 10,731 | 9,598 | 23,509 |
12. Intangible assets
Intangible assets include expenditures associated with identifiable and unique software products or internally developed software, controlled by FMO. For internally developed software, only expenses related to development phase are capitalized. Expenses related to research phase are immediately recognized in the P&L under 'Temporary Staff Expenses'.
In prior years, intangible assets were recorded under 'Property Plant and Equipment'. As per December 2019, comparatives have been adjusted. The change is related to presentation and does not impact the accounting treatment
ICT software | Internally developed software | Total | |
Cost at December 31, 2018 | 5,562 | 17,365 | 22,927 |
Accumulated amortization at December 31, 2018 | -3,357 | -6,065 | -9,422 |
Balance at December 31, 2018 | 2,205 | 11,300 | 13,505 |
- | |||
Cost at January 1, 2019 | 2,205 | 11,300 | 13,505 |
Investments | 824 | 8,174 | 8,998 |
Amortization | -920 | -3,040 | -3,960 |
Accumulated depreciation on divestments | 181 | 565 | 746 |
Impairment | -234 | -1,470 | -1,704 |
Balance at December 31, 2019 | 2,056 | 15,529 | 17,585 |
- | |||
Cost at December 31, 2019 | 6,152 | 24,069 | 30,221 |
Accumulated amortization at December 31, 2019 | -4,096 | -8,540 | -12,636 |
Balance at December 31, 2019 | 2,056 | 15,529 | 17,585 |
Impairment relates to software which is not in use anymore.