Company: BBVXF
Filing Date: 2025-08-12
Form Type: DRS
Source: 0000950123-25-007520
Chunk: 582

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-08-12
Form: DRS
Chunk 582
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 state guarantee. Overall comparison between financial asset and real estate asset impairment allowances The Group has established backtesting methodologies to compare estimated losses against actual losses. Based on this backtesting exercise, the Group makes amendments to its internal methodologies when this regular backtesting exercise reveals significant differences between estimated losses and actual losses. The backtests carried out show that the credit loss allowances are adequate given the portfolio’s credit risk profile. 1.3.4.2 Investments in joint ventures and associates The Group recognises allowances for the impairment of investments in joint ventures and associates, always provided there is objective evidence that the carrying amount of an investment is not recoverable. Objective evidence that equity instruments have become impaired is considered to exist when, after initial recognition, one or more events occur whose direct or combined effect demonstrates that the carrying amount is not recoverable. The Group considers the following indicators, among others, to determine whether there is evidence of impairment.

| – | Significant financial difficulties. |

| – | Disappearance of an active market for the instrument in question due to financial difficulties. |

| – | Significant changes in performance compared to the data included in budgets, business plans or milestones. |

| – | Significant changes in the market of the issuer’s equity instruments, its existing products, or its potential 
 products.                                                                                                     |

| – | Significant changes in the global economy or in the economic environment in which the issuer operates. |

| – | Significant changes in the technological or legal environment in which the issuer operates. |

The value of the allowances for the impairment of interests held in associates included under the heading of “Investments in joint ventures and associates” is estimated by comparing their recoverable amount against their carrying amount. The carrying amount is the higher of the fair value, less selling costs, and the value in use. The Group determines the value in use of each interest held based on its net asset value, or based on estimates of the companies’ profit/loss, pooling them into activity sectors (real estate, renewable energy, industrial, financial, etc.) and evaluating the macroeconomic factors specific to that sector which could affect the performance of those companies. In particular, interests held in insurance investees are valued by applying the market consistent embedded value methodology, those held in companies related to real estate are valued based on their net asset value, and those held in financial investees are valued using multiples of their carrying amount and/or the profit of other comparable listed companies. Impairment losses are recognised in the consolidated income statement for the year in which they materialise and