IBERSOL | Integrated Management Report | 2025

INTEGRATED MANAGEMENT REPORT 2025 Recognition and derecognition Acquisitions and disposals of financial assets are recognized on the trade date, i.e. the date on which the Group commits to ac- quire or dispose of those financial assets. Financial assets are derecognized when the Group’s contractual rights to receive their future cash flows expire, when the Group has transferred substantially all risks and rewards of ownership or when, despite retaining some but not substantially all of the risks and rewards of ownership, the Group has transferred control over the assets. Other receivables and financial assets For other receivables and financial assets carried at amortized cost, the Group prepares its analyses based on the general model, assessing at each date whether there has been a significant increase in credit risk since the date of initial recognition of such asset. If there has not been an increase in credit risk, an impairment corresponding to the amount equivalent to the expected losses over a 12-month period is calculated. If there has been an increase in credit risk, the calculation of impairment considers the expected losses for all contractual cash flows up to the maturity of the asset. A significant increase in credit risk (and the determination of impairment for all contractual cash flows of the asset to maturity) is assumed if the debtor’s external rating is materially downgraded or if a debtor is more than 90 days past due from the contractual payment date. The Group makes estimates based on default risk and loss rates, which require judgment. Inputs used to assess the risk for loss on these financial assets include: - credit ratings (to the extent they are available) obtained from information made available by rating agencies such as Standard and Poor’s and Moody’s; - significant changes in the expected performance and behavior of the obligor; and - data extracted from the market, notably on probabilities of default. Impairment of clients and other debtors IFRS 9 establishes an impairment model based on “expected losses”, which replaces the previous model based on “incurred losses” under IAS 39. In this sense, the Group recognizes impairment losses before there is objective evidence of loss of value arising from a past event. This model is the basis for the recognition of impairment losses on financial instruments held whose measurement is at amortized cost or fair value through other comprehensive income. 401