IBERSOL | Annual Report 2020

Consolidated Financial Statements b) Assets measured at fair value through other comprehensive income A financial asset is measured at fair value through other comprehensive income if the objective inherent to the business model used is achieved either by collecting contractual cash flows or by selling financial assets and if the he underlying contrac- tual cash flows represent only payment of principal and interest. The assets classi- fied in this category are initially and subsequently measured at their fair value, and the changes in their accounting value are recorded against other comprehensive income, except for the recognition of impairment losses, interest and when the fi- nancial asset is derecognized, the gain or loss accumulated in other comprehensive income is reclassified to the income statement. c) Assets measured at fair value through profit or loss Financial assets that do not meet the requirements for classification in the situations referred to above are classified and measured at fair value through profit or loss, residual category under IFRS 9. 2.10.2 Recognition and derecognition Acquisitions and disposals of financial assets are recognized on the date of their ne- gotiation, that is, on the date on which the Group undertakes to acquire or dispose of these financial assets. Financial assets are derecognised when the Group’s contractual rights to the receipt of its future cash flows expire when the Group has substantially transferred all the risks and rewards associated with its detention or when it retains, but not substan- tially, part of the risks and benefits associated with their detention, the Group has transferred control over the assets. 2.10.3 Impairment IFRS 9 establishes a new impairment model based on “expected losses”, which re- places the previous model based on “incurred losses” provided for in IAS 39. In this sense, the Group starts to recognize impairment losses before there is objective evidence of impairment. of value resulting from a past event. This model is the basis for the recognition of impairment losses on financial instruments held whose meas- urement is at amortized cost or at fair value through other comprehensive income. The impairment model depends on the occurrence or not of a significant increase in credit risk since the initial recognition. If the credit risk of a financial instrument has not increased significantly since its initial recognition, the Group recognizes an accu- mulated impairment equal to the expected loss that is expected to occur in the fol- lowing 12 months. If the credit risk has increased significantly, the Group recognizes an accumulated impairment equal to the expected loss that is estimated to occur up to the respective maturity of the asset. Once the loss event has been verified under the terms of IFRS 9 (“objective proof of impairment”, according to the terminology of IAS 39), the accumulated impairment is directly attributed to the instrument in question, and its accounting treatment, 324