15. Administrative expenses
2019
Accounting policies
| EMPLOYEE BENEFITS |
Employee benefits comprise wages and salaries and social insurance (including provisions for retirement and disability benefits, which are discussed in detail in the note “Provisions”), as well as costs of the employee pension scheme constituting a defined contribution scheme and the programme of variable remuneration components for persons occupying managerial positions, a part of which is recorded as a liability in respect of share-based payments settled in cash, in accordance with IFRS 2 Share-based payments (the programme of variable remuneration components has been discussed in detail in the note entitled “Remuneration of the PKO Bank Polski SA key management”).
Moreover, as part of wages and salaries, the Group creates a provision for future liabilities in respect of compensation and severance bonuses paid out to employees with whom the employment relationship is terminated for reasons not related to the employees, and accruals related to costs attributable to the current period, which will be incurred in the next period, including bonuses and holiday pay, taking account of all unused holiday. |
| OVERHEADS | Overheads include the costs of maintaining fixed assets, IT and telecommunications services costs, costs of administration, promotion and advertising, property protection and training.
Lease payments under short-term and low-value leases are recognized as an expense in the income statement as an expense on a straight-line basis over the lease term. |
Financial information
| ADMINISTRATIVE EXPENSES | 2019 | 2018 |
|---|---|---|
| Employee benefits | (3 215) | (3 023) |
| Overheads, of which: | (1 347) | (1 478) |
| rent | (78) | (264) |
| IT | (321) | (294) |
| Amortization and depreciation | (1 049) | (821) |
| property, plant and equipment, of which: | (656) | (370) |
| IT | (124) | (118) |
| right-of-use assets | (206) | |
| intangible assets, of which: | (391) | (451) |
| IT | (358) | (415) |
| investment properties | (2) | – |
| Total | (5 611) | (5 322) |
The decrease in rent and increase in depreciation of fixed assets resulted from adoption of IFRS 16 Leasing (for details, see Note “Leasing” and “Legal claims”).
| EMPLOYEE BENEFITS | 2019 | 2018 |
|---|---|---|
| Wages and salaries, including: | (2 693) | (2 537) |
| costs of contributions to the employee pension plan | (66) | (44) |
| restructuring costs | (32) | (26) |
| Social insurance, of which: | (432) | (404) |
| contributions for disability and retirement benefits | (363) | (343) |
| Other employee benefits | (90) | (82) |
| Total | (3 215) | (3 023) |