10 f) Fees and service income Fees and service income are recognised on an accrual basis. Exception of fees that included in calculation in part of the effective interest rate. g) Insurance/life insurance premium income Non-life insurance contract Premium income consists of direct premium and reinsurance premium less premium of cancelled policies and premiums refunded to policy holders, and adjusted with unearned premium reserve. Direct premium income is recognised on the date the insurance policy comes into effect. For long-term insurance policies with coverage periods of longer than 1 year, related premium is recorded as unearned items, and recognised as income over the coverage year. Reinsurance premium income is recognised as income when the reinsurer places the reinsurance application or the statement of accounts. Life insurance contract Premium income is recognised as income on the date the insurance policy comes into effect, after deducting premium ceded and refunded. For renewal policy, premium income is recognised as income when the premium is dued, only if the policy is still in force at the year-end date. h) Gain (loss) on financial instruments measured at fair value through profit or loss Gain (loss) on financial instruments measured at fair value through profit or loss consists of gain (loss) from trading, gain (loss) from changes in the fair value of derivatives, gain (loss) on changes in the fair value of financial assets that are measured at fair value through profit or loss, and gain (loss) on sales of financial assets that are measured at fair value through profit or loss and derivatives, which the Company and its subsidiaries recognise income or expenses on the transaction date. i) Fee and commission income from reinsurers Fee and commission income from reinsurers are recognised when the insurance risk is transferred to another insurer. Fee and commission income from reinsurers with coverage periods longer than 1 year are recorded as unearned items and recognised as income over the coverage period each year. 226
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