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 2022, 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 of Bank Pekao S.A. Group for the period nine months of 2022, the Group and the Bank made the following changes to the accounting principles:

1. a change in the quantitative criteria for determining significant

Due to entry into force on 1 January 2022 of the ‘Recommendation R on the principles of credit exposure classification, estimation and recognition of expected credit losses and credit risk management’ issued by the Polish Financial Supervision Authority. The Group uses the criterion of extending the loan period by at least 1 year and at least doubling the residual period to the original maturity (meeting both conditions jointly) for all exposures, regardless of their classification to risk groups (before the change, this criterion applied to Stage 1 and Stage 2).

The above-mentioned changes of the accounting principles resulted in the identification of new POCI assets and the need to transform the comparable data in terms of the gross value of loans and advances to customers measured at amortized costs and the value of allowances for expected credit losses relating to these loans (presentation changes between Stage 3 and POCI assets), but they had no impact on the total net value of loans and advances to customers.

The impact of changes on the comparative data of the consolidated statement of financial positions is presented in the tables below.

2. a change in the method of presenting the depreciation costs of property, plant and equipment and intangible

The Group has presented the above-mentioned costs under ‘General administrative expenses and depreciation’. Before the change, they were presented in a separate item of the income statement ‘Depreciation and amortization’.

In the Group’s opinion, the change in the presentation of the above-mentioned costs increases the transparency of the income statement from the point of view of its users.

The above-mentioned changes of the accounting principles made it necessary to transform the comparable data, but they did not affect the level of the presented financial result.

The impact of changes on the comparative data of the consolidated income statement is presented in the tables below.