Financial guarantees
Financial guarantee contracts are initially recognized at fair value (i.e., usually the fee received). Subsequently, these contracts are measured at the higher of:
• | The amount determined as the best estimate of the net expenditure required to settle the obligation according to the guarantee contract. |
• | The recognized contractual fee less cumulative amortization when amortized over the guarantee period, using the straight-line-method. |
• | The best estimate of the net expenditure comprising future fees and cash flows from subrogation rights. |