14. General administrative expenses and depreciation
Significant accounting policies
General administrative expenses
Personnel expenses and other employee benefits mainly include wages and salaries, social insurance and share based payments costs which are described in detail in Note 39.
Other administrative expenses mainly include the tax of certain financial institutions, maintenance costs of Group’s fixed assets, IT and telecommunications infrastructure also marketing and advertising costs.
This cost category also includes contributions and payments to the Bank Guarantee Fund (quarterly contributions to the banks’ guarantee fund and annual contribution to the banks’ compulsory resolution fund paid once a year), the fee paid to the aid fund established in the Protection Scheme Managing Entity and a mandatory fees to the Polish Financial Supervision Authority (to cover the cost of banking supervision and to cover the costs of supervision over the capital market) which Group recognizes in the profit or loss at the time of the obligating event.
Depreciation
Depreciation expense for property, plant and equipment and investment properties and the amortization expense for intangible assets are calculated using straight line method over the expected useful life of an asset. Depreciated value is defined as the purchase price or cost to develop a given asset, less residual value of the asset. Depreciation rates and residual values of assets, determined for balance-sheet purposes, are subject to regular reviews, with results of such reviews recognized in the same period.
The statement of financial position depreciation and amortization rates applied to property, plant and equipment, investment properties and intangible assets are as follows:
a) depreciation rates applied for non-current assets
b) amortization rates for intangible assets
Land, non-current assets under construction and intangible assets under development are not subject to depreciation and amortization.
Depreciation are charged to the income statement in the item ‘General administrative expenses and depreciation’, whereas the impairment losses are charged to the income statement in the item ‘Other operating expenses’.
Financial data
Personnel expenses
(**) Estimated costs of additional contributions to the Borrowers Support Fund (‘BSF’), resulting from an Art. 89 para 1 of the Act of 7th July 2022 on social financing for business ventures and support to borrowers, which obliges lenders to contribute a total of PLN 1.4 billion to the BSF by 31 December 2023.