Notes to the consolidated financia
statements
7 Corporate information
2 Accounting policies
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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