ÖBB Annual Report 2025

215 Consolidated Financial Statements Österreichische Bundesbahnen-Holding Aktiengesellschaft Consolidated Financial Statements | Group Management Report 23 General impairment model According to the general impairment model, a distinction is made between three stages of impairment. The amount of the impairment loss is measured according to the allocation of the financial instrument to one of these three stages. The general impairment model is applied to all financial instruments with the exception of trade receivables. Level 1: expected credit losses within the next twelve months Stage 1 basically includes all financial instruments at inception as well as financial instruments that have not experienced any significant deterioration in credit quality since inception. The expected loss corresponds to the present value of the expected defaults in payment that arise from potential default events within the next twelve months (12-month expected credit loss) following the reporting date. Stage 2: expected credit losses over the entire term – no impaired credit rating If there is a significant increase in the default risk but no objective evidence of impairment, the allowance for losses on loans and advances must be increased to the amount of the expected losses over the entire remaining term. There is a rebuttable presumption of a transfer from Stage 1 to Stage 2 if contractual payments have been past due for more than 30 days. Stage 3: expected credit losses over the entire term – impaired creditworthiness If there is objective evidence that a financial asset is impaired, the impairment loss is transferred to Stage 3. If the contrac- tual cash flows are past due by more than 90 days, there is a rebuttable presumption that there is objective evidence of default. Thus, the financial instrument must be transferred to Stage 3. The determination of whether a financial asset has experienced a material increase in credit risk is based on an assessment of probabilities of default made at least annually, which takes into account both external rating information and internal information about the credit quality of the financial asset. The probability of default is taken into account at the time of the initial recognition of assets and the existence of a significant increase in the default risk during all reporting periods. In order to assess whether the default risk has increased significantly, the default risk with respect to the asset on the balance sheet date is compared with the default risk at the time of initial recognition. The available, appropriate and reliable forward-looking information is taken into account. Irrespective of the above analysis, there is a significant increase in credit risk if settlement of the contractual cash flows is more than 30 days past due. A default on a financial asset occurs when the counterparty fails to make contractual payments within 90 days of the due date. Financial assets are depreciated if realizability is no longer expected after an appropriate assessment. If receivables have been written off, enforcement measures are continued in order to realize the due receivable. Realized amounts are recognized in profit or loss. Financial instruments with low credit risk In the case of debt instruments with a low credit risk that have an investment grade rating, the ÖBB Group applies the relief provision from the allocation to the relevant stages and allocates these in all cases to Stage 1. The ÖBB Group considers this to be a given with a rating of BBB- or higher at Standard & Poor’s. Simplified impairment model Trade receivables In the case of trade receivables, the ÖBB Group applies the simplified approach to be applied as mandatory in accordance with IFRS9, according to which the credit losses expected over the term must be calculated upon initial recognition of the receivables. Under the simplified impairment model, a risk provision must be recognized in the amount of the expected losses over the remaining term for all instruments regardless of their credit quality. The simplified procedure shall be applied to trade receivables or assets within the scope of IFRS15 “Revenue from Contracts with Customers” that do not contain a significant financing component. If there are objective indications of impairment (e.g., insolvencies), specific allowances are recognized. The default risk for trade receivables is determined on a collective basis. The Group’s default risk is mainly influenced by the individual characteristics of its customers. An impairment allowance matrix is applied to trade receivables in order to measure ECLs for trade receivables. The loss ratios are calculated using a “roll rate” method, which is based on the proba- bility that a receivable will pass through the successive stages of being past due until it is derecognized. The roll rates are implemented for all receivables as a whole. The loss ratios are based on actual payment and credit default data from the past eight years. If necessary, the historical default rates are adjusted for expected future changes in macroeconomic factors such as gross domestic product (GDP), the unemployment rate, and insolvency rates.