F.28. Offsetting of financial instruments
The following table presents the recognized financial instruments that are subject to enforceable master netting arrangements or other similar agreements but not offset, as at 31 December 2016 and 2015, and shows what the net impact would be on the Company’s statements of financial position if all set-off rights were exercised. There are no instruments that are offset as at 31 December 2016 and 2015.
| In CZK million, as at 31 December 2016 | Note | Derivativeassets | Derivative liabilities | Reinsurance receivables |
|---|---|---|---|---|
| Financial instrument total carrying value | F.3.4., F.12. | 203 | (1,532) | 2,229 |
Financial instruments not subject to master netting agreements | 74 | (357) | 1,560 | |
Financial instrument subject to master netting agreements | 129 | (1,175) | 669 | |
| Collateral paid/Cash deposit received | F.5. | – | 1,290 | (1,401) |
| Amounts presented in the balance sheet | 129 | 115 | (732) | |
| Effect of master netting agreement | (1,175) | 129 | – | |
| Net amount after master netting agreement | (1,046) | 244 | (732) |
| In CZK million, as at 31 December 2015 | Note | Derivativeassets | Derivative liabilities | Reinsurance receivables |
|---|---|---|---|---|
| Financial instrument total carrying value | F.3.4., F.12. | 357 | (1,258) | 2,211 |
Financial instruments not subject to master netting agreements | 73 | (232) | 1,569 | |
Financial instrument subject to master netting agreements | 284 | (1,026) | 642 | |
| Collateral paid/Cash deposit | F.5. | – | 695 | (1,402) |
| Amounts presented in the balance sheet | 284 | (331) | (760) | |
| Effect of master netting agreement | (1,026) | 284 | – | |
| Net amount after master netting agreement | (742) | (47) | (760) |
As regards to derivative assets and liabilities the Company is subject to an enforceable master netting arrangement in the form of an ISDA agreement with a derivative counterparty. Under the terms of this agreement, offsetting of derivative contracts is permitted only in the event of bankruptcy or default of either party to the agreement. In order to manage the counterparty credit risk associated with derivative trades, the parties have executed a collateral support agreement.
Concerning the reinsurance receivables the reinsurer’s deposit with the Company derives from a certain part of the ceded premium (i.e. funds) as a security of its ability to fulfil its future obligation, without any undue delay.