has a reliably measurable impact on the amounts that the Group will receive from the reinsurer. Impairment losses on reinsurance assets are recognised in profit and loss for the period. Reinsurance liabilities Reinsurance liabilities consist of premiums payable for reinsurance contracts and are recognised as an expense when due. Reinsurance and payables related to insurance contracts Insurance receivables and payables are recognised when due. These include amounts due to and from agents, brokers, cedents and insurance contract holders. 4.2.3 Investment contracts Investment contracts are recognised as financial liabilities in the Statement of Financial Position at fair value when the Group becomes party to their contractual provisions. Contributions received from policyholders are not recognised in profit or loss but are accounted for as deposits. Amounts paid to policyholders are recorded as deductions from the investment contract liabilities. All investment contracts issued by the Group are designated by the Group on initial recognition as at fair value through profit or loss. This designation eliminates or significantly reduces a measurement inconsistency that would otherwise arise if these financial liabilities were not measured at fair value, since the assets held to back the investment contract liabilities are measured at fair value. Changes in the fair value of investment contracts are included in profit or loss in the period in which they arise. The change in fair value represents a change in the fair value of the assets linked to these investment contracts. The fair value of the Investment contract liability is equal to that of the assets in the unitised fund underlying the policies, as reflected by the value of units held by each policyholder. The carrying amount of the assets backing the investment contract liabilities under investment contracts reflect the fair value of the assets concerned, thus the actuarial valuation of the investment contract liabilities under unmatured investment contracts also reflect the fair value of the contractual liabilities. Receivables and payables related to investment contracts Amounts due from and to policyholders and agents in respect of investment contracts are included in insurance and other receivables and payables. 5. Foreign currency translation 5.1 Transactions and balances The consolidated financial statements are presented in Rands (‘the functional currency’ in terms of IFRS), which is the Group’s presentation currency. Foreign currency transactions are translated into Rands using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit or Loss and Other Comprehensive Income. 4. Insurance and investment contracts (continued) 4.2 Valuation and recognition (continued) 4.2.2 Short-term insurance contracts (continued) 115 Group Accounting Policies
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