Logotype

information of prudential relevance 2012

7.1. Differentiation between portfolios held for sale and those held for strategic purposes

Print this page

7.1.1. Portfolios held for sale

The portfolio held for sale is reflected in accounting terms by the "available-for-sale assets" entry. In the case of capital instruments, this portfolio will include the capital instruments of institutions that are not strategic, that are not classified as the Group's subsidiaries, associates, or jointly controlled entities, and that have not been included in the fair value through profit or loss category.

7.1.2. Portfolios held for strategic purposes

The portfolio held for strategic purposes is included for accounting purposes under the heading of available-for-sale financial assets. An investment in capital instruments is considered strategic when it has been made with the intent of setting up or maintaining a long-term operating relationship with the subsidiary, although there is no significant influence on it, if at least one of the following situations is in place:

  • Representation on the Board of Directors or equivalent management body in the subsidiary.
  • Participation in the policy setting process, including those related to dividends and other payouts.
  • The existence of significant transactions between the investing institution and the subsidiary.
  • The exchange of senior management staff.
  • The supply of expert information of an essential nature.

Tools