Discount rates (table)

Assets are tested at a minimum on each balance sheet reporting date for indications of impairment. Intangible assets with an indefinite useful life (primarily goodwill) are tested even if there are no signs of impairment. Since scheduled amortisation of goodwill resulting from mergers is not permitted under IFRS 3 (business combinations), the Vienna Insurance Group performs impairment tests at least once a year. For this reason, the subsidiaries are combined into an economic unit (CGU) at the level of the region (secondary reporting segment), separated into life and non-life (primary reporting segment). Impairment arises only if there is a need to write down the entire economic unit. The value in use of the economic units is calculated using the earnings-based discounted cash flow method. The capitalised earnings value is calculated using budget projections for the next three years. Earnings following the three-year period are extrapolated using an annual growth rate. Discount rates are calculated using a base rate equal to the average annual return on Austrian government bonds adjusted for sector and market risk.

Information on the impairment testing of financial assets is provided in the section entitled “General information on the accounting for investments”.

Audited information


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