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46. Other liabilities

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46.1 Accounting policy

Financial liabilities are recognized in the statement of financial position when the PZU Group company becomes a party to a binding contract in which it assumes the risk associated with the financial instrument. In the case of transactions concluded on an organized market, the purchase or sale of financial liabilities are recognized in the books on the date of the transaction.

A financial liability (or part thereof) is excluded from the consolidated statement of financial position when the obligation specified in the contract is discharged or canceled or expires.

Financial liabilities measured at fair value through profit or loss included in particular:

  • liabilities on borrowed securities (short sale);
  • investment contracts for the client’s account and risk (unit-linked);
  • liabilities to members of consolidated mutual funds.

Financial liabilities measured at amortized cost included in particular liabilities on account of repurchase transactions.

Due to the short-term nature, trade liabilities are recognized at the amount of the required payment.

Accrued expenses resulting from benefits provided for PZU Group companies by external business partners or from an obligation to provide benefits whose value can be estimated, despite the fact that the date when the liability is created is not yet known, is measured at the amount of estimated future cash flows.

The cost of employee vacation time is recognized on an accrual basis, using the liability method. The liability on account of employee vacation time is determined based on the difference between the actual amount of vacation time used by employees and the amount that would have been used if the vacation time had been taken pro rata to the elapse of time in the period when the employees are entitled to their vacation time.

46.2 Quantitative data

Other liabilities 31 December 2020 31 December 2019
(restated)
Liabilities measured at fair value 1,389 675
Liabilities on borrowed securities (short sale) 851 293
Investment contracts for the client’s account and risk (unit-linked) 268 259
Liabilities toward participants in consolidated mutual funds 265 90
Liability on the settlement of the acquisition of Tomma shares 5 33
Accrued expenses 1,963 2,030
Accrued expenses of agency commissions 359 390
Accrued payroll expenses 609 635
Accrued reinsurance expenses 731 706
Other 264 299
Deferred revenue 395 322
Other liabilities 8,687 7,572
Liabilities on account of repurchase transactions 1,154 599
Lease liabilities 1,064 1,066
Liabilities due under transactions on financial instruments 1,044 905
Liabilities to banks for payment documents cleared in interbank clearing systems 1,140 1,096
Liabilities on direct insurance 915 892
Liabilities on account of payment card settlements 354 408
Regulatory settlements 223 289
Liabilities for contributions to the Bank Guarantee Fund 514 356
Reinsurance liabilities 223 197
Estimated non-insurance liabilities 143 161
Liabilities to employees 42 47
Estimated refunds of compensation in connection with banks’ clients lapsing or withdrawing from insurance purchased during the sale of credit products 30 69
Trade liabilities 611 258
Current income tax liabilities 355 352
Liabilities on account of employee leaves 156 139
Liabilities to the state budget, other than income tax liabilities 116 182
Liabilities on account of donations 21 23
Alior Bank’s liabilities for insurance of bank products offered to the bank’s clients 21 12
Insurance Guarantee Fund 14 15
Liability for the refund of loan costs 88 106
Liabilities for direct claims handling 31 29
Other 428 371
Other liabilities, total 12,434 10,599

As at 31 December 2020 and 31 December 2019, the fair value of other liabilities did not differ significantly from their carrying amount, primarily due to fact that over 90% of them are short-term liabilities.

Other liabilities by maturity 31 December 2020 31 December 2019
(restated)
Up to 1 year 11,246 9,592
1 to 5 years 759 544
Over 5 years 429 463
Total other liabilities by maturity 12,434 10,599