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40.3 Other capital

Annual Report 2018 > RESULTS 2018 > Supplementary Information and Notes > 40.3 Other capital
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40.3.1 Accounting policy

Treasury shares purchased and retained by consolidated PZU Group companies are shown at purchase price. The “Supplementary capital” item includes:

  • the effect of distribution of profit, in accordance with the legal regulations in effect in the country of the company's domicile (in Poland under the Commercial Company Code) and the articles of association of PZU Group companies;
  • the capital created upon the sale of investment property previously transferred from own property, according to the rules described in section 31;
  • the difference between the change in value of non-controlling interest and fair value of payment in transactions with non- controlling interests.

Results of the following are posted in the “Revaluation reserve” item:

  • revaluation of financial assets classified as assets measured at fair value through other comprehensive income – from 1 January 2018 (until 31 December 2017 – available-for-sale financial assets);
  • revaluation of property to its fair value on the date when it is classified from own property to investment property;
  • measurement of hedging instruments, in respect to the part constituting effective cash flow hedge; after taking into account the corresponding change in deferred tax assets or liabilities;

The item “Actuarial gains and losses related to provisions for employee benefits” includes amounts resulting from increases or decreases in the present value of the defined benefit obligation because of changes in actuarial assumptions and experience adjustments – demographic (e.g. mortality, employee turnover) and financial (e.g. discount rate or projected salary growth rate).

“Foreign exchange translation differences” include differences resulting from translation of financial data of foreign entities using exchange rates, in accordance with the rules described in section 5.5.   

40.3.2 Quantitative data

Other capital 31 December 2018 31 December 2017
Treasury shares (11) -
Supplementary capital 12,660 11,824
Share premium account 538 538
Distribution of results of PZU Group companies 12,079 11,231
Other 43 55
Revaluation reserve (65) 157
Valuation of debt instruments measured at fair value through other comprehensive income 94 78
Valuation of equity instruments measured at fair value through other comprehensive income (255) n/a
Reclassification of real property from property, plant and equipment to investment property 78 85
Entities measured by the equity method 1 1
Cash flow hedging 17 (7)
Other reserve capital 18 5
Actuarial gains and losses related to provisions for employee benefits - 4
Foreign exchange translation differences (36) (73)
Lietuvos Draudimas AB 15 (13)
AAS Balta 7 -
PZU Ukraine (49) (51)
PZU Ukraine Life (10) (10)
Other 1 1
Total other capital 12,566 11,917

Change in the revaluation reserve resulting from measurement of debt instruments measured at fair value through other comprehensive income (2018) / available for sale (2017) 1 January – 31 December 2018 1 January – 31 December 2017
Balance at the beginning of the period 78 25
Application of IFRS 9 7 n/a
Changes 9 53
- change in fair value 30 132
- sale (21) (79)
Balance at the end of the period 94 78

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