## NOTE 2.29 POLICYHOLDER CLAIMS AND BENEFITS 

Policyholder claims and benefits consist of claims and benefits paid to policyholders, including benefit claims in excess of account value for products for which deposit accounting is applied and the change in the valuation of liabilities for insurance and investment contracts. It includes internal and external claims handling costs that are directly related to the processing and settlement of claims. Amounts receivable in respect of salvage and subrogation are also considered. 

## NOTE 2.30 RESULTS FROM FINANCIAL TRANSACTIONS 

Results from financial transactions include: 

## Net fair value change of general account fi nancial investments at fair value through profit or loss, other than derivatives 

Net fair value change of general account financial investments at fair value through profit or loss, other than derivatives include fair value changes of financial assets carried at fair value through profit or loss. The net gains and losses do not include interest or dividend income. 

## Realized gains and losses on fi nancial investments 

Gains and losses on financial investments include realized gains and losses on general account financial assets, other than those classified as at fair value through profit or loss. 

## Net fair value change of derivatives 

All changes in fair value are recognized in the income statement, unless the derivative has been designated as a hedging instrument in a cash flow hedge or a hedge of a net investment in a foreign operation. Fair value movements of fair value hedge instruments are offset by the fair value movements of the hedged item, the resulting hedge ineffectiveness, if any, is included in this line. In addition the fair value movements of bifurcated embedded derivatives are included in this line. 

## Net fair value change on for account of policyholder fi nancial assets at fair value through profit or loss 

Net fair value change on for account of policyholder financial assets at fair value through profit or loss include fair value movements of investments held for account of policyholders (refer to note 2.9). The net fair value change does not include interest or dividend income. 

## Other 

In addition, results from financial transactions include gains / losses on real estate (general account and account of policyholder), net foreign currency gains / (losses) and net fair value change on borrowings and other financial liabilities and realized gains on repurchased debt. 

## NOTE 2.31 IMPAIRMENT CHARGES 

Impairment charges include impairments on investments in financial assets, impairments on the valuation of insurance assets and liabilities and other non-financial assets and receivables. Refer to note 39. 

## NOTE 2.32 INTEREST CHARGES AND RELATED FEES 

Interest charges and related fees includes interest expense on trust pass-through securities and other borrowings. Interest expense on trust pass-through securities and other borrowings carried at amortized cost is recognized in profit or loss using the effective interest method. 

## NOTE 2.33 LEASES 

Arrangements that do not take the form of a lease but convey a right to use an asset in return for a payment are assessed at inception to determine whether they are, or contain, a lease. This involves an assessment of whether fulfillment of the arrangement is dependent on the use of a specific asset and whether the purchaser (lessee) has the right to control the use of the underlying asset. 

Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases. 

Payments made under operating leases, where the Group is the lessee, are charged to the income statement on a straight line basis over the period of the lease. 

Where the Group is the lessor under an operating lease, the assets subject to the operating lease arrangement are presented in the balance sheet according to the nature of the asset. Income from these leases are recognized in the income statement on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. 

## NOTE 2.34 EVENTS AFTER THE BALANCE SHEET DATE 

The financial statements are adjusted to reflect events that occurred between the balance sheet date and the date when the financial statements are authorized for issue, provided they give evidence of conditions that existed at the balance sheet date. 

Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves. 

