17.4. Contingent assets and liabilities

SELECTED ACCOUNTING PRINCIPLES

Contingent assets and liabilities

The Group discloses at the end of reporting period information on contingent assets if the inflow of resources embodying economic benefits is probable. If it is practicable the Group estimates the financial impact of contingent assets valuing them according to the principles of valuation provisions.

At the end of reporting period the Group discloses information on contingent liabilities if:

• it has a possible obligation, which arose as a result of past events, the existence of which will be confirmed only when one or more uncertain future events occur that are not fully controlled by the Group, or
• it has a current obligation, which arose as a result of past events, but an outflow of funds have economic benefits in it, is not probable or the Group is not able to valuate liabilities reliably enough.

The Group does not disclose the contingent liability when the probability of outflow of funds included economic benefits is remote.

ESTIMATES

Contingent assets

The Group makes estimations with respect to financial effects of disclosed contingent assets based on the value of previously recognized related costs that the Group expects to recover (e.g. under insurance contracts signed) or the value of subjects to proceedings in which the ORLEN Group entities act as plaintiff.

Contingent liabilities

The Group estimates possible future liabilities constituting contingent liabilities based on the value of claims under ongoing proceedings in which the ORLEN Group entities act as the defendant.