136 JUST GROUP PLC Annual Report and Accounts 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
17 FAIR VALUE continued Credit spreads The valuation of deposits received from reinsurers includes a credit spread derived from the assets hypothecated to back these liabilities. A credit spread of 205bps (2019: 181ps) was applied in respect of the most significant reinsurance contract. Sensitivity analysis Reasonable possible alternative assumptions for unobservable inputs used in the valuation model could give rise to significant changes in the fair value of the liabilities (see note 27 (b)). The Group has estimated the impact on fair value to changes to these inputs as follows:
Credit spreads +100bps
Deposits received from reinsurers net increase/(decrease) in fair value (£m)
Interest rates +100bps
(80.1) (81.2)
(218.6) (200.9)
2020 2019
18 DEFERRED TAX
2020
2019
Asset £m
Liability £m
Total £m
Asset £m
Liability £m
Total £m
– – –
(4.2)
(4.2)
Transitional tax Intangible assets Land and buildings Other provisions Total deferred tax
– – –
(6.0)
(6.0)
(17.8)
(17.8)
(19.0)
(19.0)
(0.8)
(0.8)
(0.9) (0.4)
(0.9)
11.5 11.5
–
11.5
11.5 11.5
11.1
(22.8)
(11.3)
(26.3)
(14.8)
The transitional tax liability of £4.2m (2019: £6.0m) represents the adjustment arising from the change in the tax rules for life insurance companies which is amortised over ten years from 1 January 2013 and the transitional adjustments for tax purposes in adopting IFRS which is amortised over ten years from 1 January 2016.
Other provisions principally relate to temporary differences between the IFRS financial statements and tax deductions for statutory insurance liabilities.
The movement in the net deferred tax balance was as follows:
Year ended 31 December 2020 £m
Year ended 31 December 2019 £m
(14.8)
Net balance at 1 January Recognised in profit or loss
(13.6)
3.4 0.1
(1.2)
Recognised in other comprehensive income
–
Net balance at 31 December
(11.3)
(14.8)
The Group has unrecognised deferred tax assets of £5.3m (2019: £3.9m).
19 INSURANCE AND OTHER RECEIVABLES
2020 £m 21.0
2019 £m 11.1
Receivables arising from insurance and reinsurance contracts
3.8 7.2
Finance lease receivables
2.7
Other receivables
11.7 25.5
Total insurance and other receivables
32.0
Finance lease receivables are due as follows:
2020 £m
2019 £m
1.6 1.6 0.7
Less than one year
0.8 0.8 0.8 0.4 2.8
Between one and two years Between two and three years Between three and four years
–
Total undiscounted lease payments receivable
3.9
(0.1)
Unearned finance income Net investment in leases
(0.1)
3.8
2.7
Other than finance lease receivables, insurance and other receivables of £nil (2019: £nil) are expected to be recovered more than one year after the Consolidated statement of financial position date.
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