5.1. Basis of preparation of Consolidated Financial Statements

The financial statements have been prepared in Polish zloty, and all data in the financial statements are presented in PLN thousand (PLN ‘000).

The financial statements have been prepared on a going concern basis on the assumption that the Group will continue its business operations substantially unchanged in scope for a period of at least one year from the balance sheet date.
The accounting principles as described below have been consistently applied for all the reporting periods. The principles have been applied consistently by all the Group entities.

The consolidated financial statements have been prepared on the historical cost basis, except for significant items of
financial assets and liabilities, for which the measurement method is presented in Note 5.4. The consolidated financial statements include the requirements of all the International Financial Reporting Standards and International Accounting Standards approved by the European Union and related interpretations. Changes in published standards and interpretations, which became effective on or after 1 January 2021, had no material impact on the Group’s financial statements.

The financial statements does not take into consideration interpretations and amendments to Standards, pending approval by the European Union or approved by the European Union but came into force or shall come into force after the balance sheet date (Note 4.2 and Note 4.3). In the Group’s opinion, amendments to Standards and interpretations will not have a material impact on the consolidated financial statements of the Group.

In the consolidated financial statements for the year ended on 31 December 2021, the Group changed the presentation of selected items in the statement of the financial position:

1. the securities, previously presented under ‘Financial assets held for trading’ and ‘Investment securities’ have been presented under ‘Securities’.
2. under ‘Assets pledged as security for liabilities’ separate securities that constitute security for liabilities for which the recipient has the right to sell these securities or exchange them for another security,
3. the Group ceased to present securities broken down by valuation methods in the consolidated statement of financial position,
4. the Group ceased to present the item ‘Loans and advances to customers (including receivables from finance leases)’ broken down by valuation methods.

All the above changes in the Group’s opinion increase the transparency of the statement of financial position from the point of view of its users..

The above-mentioned changes resulted in restatement of comparable data, but without impact on the balance sheet total level.

The impact of changes on the comparative data of the statement of financial position is presented in the table below.

As a result of changes in the presentation of securities in the consolidated statement of financial position, the Group also changed the method of their presentation in the consolidated statement of cash flows..

The items ‘Change in financial assets held for trading’ and ‘Change in investment securities’ were presented in the item ‘Change in securities (including Assets pledged as security for liabilities)’. The indicated changes concerned cash flows from operating activities, the total level of which did not change.

The impact of changes on the comparative data of the cash flow statement is presented in the table below.

In addition, in the consolidated financial statements for the year ended December 31, 2021, the Group changed the method of presentation of collection costs in the profit and loss account. These costs are currently presented in the item ‘Other operating expenses’. Before the change they were presented in the item ‘Other administrative expenses.

Change in the presentation of the above-mentioned costs is intended to better reflect the economic nature of those costs and to ensure greater comparability with other market participants.

The above-mentioned changes made it necessary to transform the comparative data, but they did not impact for t the level of the presented financial result.

The impact of the changes on the comparative data of the consolidated profit and loss account is presented in the table below.

The Group also changed the method of presenting the items in the statement of comprehensive income, adjusting the presentation of individual components of this statement to the components presented in the statement of changes in equity. Currently the items of the statement of comprehensive income are presented in net amounts. Before the change, they were presented as gross amounts with a separate item for income tax.

The above mentioned changes made it necessary to convert the comparative data, however, they had no effect on the level of the presented result of comprehensive income.