7.4 Polish Accounting Standards applied

7.4.1. PZU

PAS and the differences between PAS and IFRS in respect of financial reporting of PZU were presented in detail in the annual separate financial statements of Powszechny Zakład Ubezpieczeń Spółka Akcyjna for the year 2016.

The separate financial statements of PZU for 2016 are available on the PZU website at www.pzu.pl under “Investor Relations”.

7.4.2. PZU Życie

PZU Życie accounting policies according to PAS are convergent with PAS regarding PZU.

In accordance with IFRS, the specific difference with respect to PZU Życie are accounting policies regarding insurance and investment contracts of PZU Życie presented in points 5.12.3, 5.12.5, 5.17.1.2, 5.17.2.2.

The key difference between PAS and IFRS as regards accounting for insurance and investment contracts of PZU is the classification of contracts. In PAS there is no concept of investment contract and, as a result, all contracts are classified as insurance contracts. According to IFRS, the classification of contracts should follow the guidelines included in IFRS 4 regarding the classification of products as insurance contracts (subject to IFRS 4) or as investment contracts (recognized in accordance with IAS 39). In the case of the latter, the written premium is not recognized. The classification of contracts is described in point 6.1.2.