Notes to the consolidated financia statements 7 Corporate information 2 Accounting policies - Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3 As of 1 January 2016, the 106 local Rabobanks and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. were legally merged and the name of Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. was changed to Coöperatieve Rabobank U.A.The legal merger has no impact on the consolidated figures as the local Rabobanks have always been consolidated in the Rabobank Group financial statements. The Consolidated financial statements of Rabobank includes the financial information of Cooperative Rabobank U.A. and that of the group companies. The primary accounting policies used in preparing these consolidated financial statements are set out below. 2.1 Basis of preparation The consolidated financial statements of Rabobank have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The consolidated financial statements have been prepared on the basis of the accounting policies set out in this section. Unless otherwise stated, assets and liabilities are accounted for on the historical cost basis and all amounts in these financial statements are in millions of euros. New and amended standards issued by the IASB and adopted by the European Union, that are applicable to the current financial year Early adoption of a specific part of IFRS 9 on fair value of financial liabilities designated at fair value through profit or loss According to paragraph 7.1.2 of IFRS 9 ('Financial Instruments'), an entity may early adopt the requirement to present changes in the fair value of financial liabilities designated at fair value through profit or loss that are attributable to changes in credit risk in other comprehensive income ('OCI'). Rabobank has elected to early adopt this requirement in IFRS 9 for the own credit adjustment included in the valuation of financial liabilities designated at fair value through profit or loss, which mainly consists of the structured notes portfolio. Excluding fair value changes resulting from changes in own credit risk from the statement of income means that Rabobank will no longer report profits or losses when the creditworthiness of Rabobank changes. As a result of early adopting this requirement in IFRS 9, the fair value changes resulting from own credit risk are accounted for in OCI in equity (net of tax) as opposed to the statement of income. When financial liabilities designated at fair value through profit or loss are derecognised (for instance due to buy-backs) the cumulative own credit risk adjustment remains in equity and is reclassified from OCI to retained earnings at the end of each reporting period, without being recycled to the statement of income. The early adoption to report own credit adjustment on financial liabilities designated at fair value through profit or loss in OCI has been applied by Rabobank as from 1 January 2016. Comparative figures have not been restated. Differences have been recorded in the opening balance sheet as at 1 January 2016 as follows: In 2016 Rabobank recognised a loss of 365 (net of tax) in OCI relating to fair value changes in financial liabilities designated at fair value through profit or loss resulting from changes in own credit risk. As a result net profit in 2016 would have decreased by 365 if Rabobank would not have elected to early adopt this element of IFRS 9. In 2016 0 has been reclassified from OCI to retained earnings as a result of derecognition of financial liabilities designated at fair value through profit or loss. There were no other changes to the classification and measurement of financial liabilities designated at fair value. Impact of early adoption of IFRS 9atl January 2016 Amounts in millions of euros Revaluation reserve - Fair value changes due to own credit risk on financial liabilities designated at fair value Closing balance as at 31 December 2015 Reclassification from retained earnings 62 Opening balance as at 1 January 2016 62 Retained earnings Closing balance as at 31 December 2015 25,399 Reclassification of own credit adjustment on financial liabilities designated at fair value (62) Opening balance as at 1 January 2016 25,337 176 Rabobank Jaarverslag 2016

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Jaarverslagen Rabobank | 2016 | | pagina 177