Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
As at 31 December 2016, the participants are:
Coöperatieve Rabobank U.A., Amsterdam
Rabohypotheekbank N.V., Amsterdam
Raiffeisenhypotheekbank N.V., Amsterdam
De Lage Landen International B.V., Eindhoven
De Lage Landen Financiering B.V., Eindhoven
De Lage Landen Trade Finance B.V., Eindhoven
De Lage Landen Financial Services B.V., Eindhoven
On 1 January 2016, the local Rabobanks and Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A. entered into
a legal merger and the name of Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A. was changed to Coöperatieve
Rabobank U.A.
2.2.2 Investments in associates and joint ventures
Investments in associates and joint ventures are initially
recognised at cost and subsequently accounted for using the
equity method of accounting. Its share of post-acquisition
profits and losses are recognised in the income statement
and its share of post-acquisition movements in reserves
are recognised directly in other comprehensive income.
The cumulative post-acquisition movements are included in the
carrying amount of the investment.
Associates are entities over which Rabobank can exercise
significant influence and in which it generally holds between
20% and 50% of the voting rights but does not have control.
A joint venture is an agreement between one or more parties
under which the parties jointly have control and are jointly
entitled to the net assets under the agreement. Unrealised
profits on transactions between Rabobank and its associates
and joint ventures are eliminated in proportion to Rabobank's
interest in the respective associates and joint ventures.
Unrealised losses are also eliminated unless the transaction
indicates that an impairment loss should be recognised on the
asset(s) underlying the transaction.
Investments in associates include the goodwill acquired.
Where the share of an associate's losses is equal to or exceeds
its interest in the associate, losses are recognised only where
Rabobank has given undertakings to, or made payments on
behalf of, the associate.
2.3 Derivatives and hedging
General
Derivatives generally comprise foreign exchange contracts,
currency and interest rate futures, forward rate agreements,
currency and interest rate swaps and currency and interest rate
options (written or acquired). Derivatives are recognised at fair
value determined on the basis of listed market prices (with mid-
prices being used for EUR, USD and GBP derivatives that have
a bid-ask range), prices offered by traders, discounted cash flow
models and option valuation models based on current market
prices and contract prices for the underlying instruments
and reflecting the time value of money, yield curves and the
volatility of the underlying assets and liabilities. Derivatives
are included under assets if their fair value is positive and
under liabilities if their fair value is negative. If their risks and
characteristics are not closely related to those of the underlying
non-derivative host contract and the contract is not classified
as at fair value, derivatives that are embedded in other financial
instruments are bifurcated and measured separately with
unrealised profits and losses being recognised in profit and loss
in 'Gains/ (losses) on financial assets and liabilities at fair value
through profit or loss'.
Instruments not used for hedging
Realised and unrealised gains and losses on derivatives for
trading purposes are recognised atfair value in'Gains/ (losses) on
financial assets and liabilities at fair value through profit or loss'.
Hedging instruments
Derivatives are used for asset and liability management
of interest rate risks, credit risks and foreign currency risks.
Rabobank makes use of the IAS 39 EU carve-out options, which
allow the application of fair value portfolio hedge accounting to
certain positions.
At the time of inception, derivatives are designated as one
of the following: (1) a hedge of the fair value of an asset,
a group of assets or a liability in the statement of financial
position (fair value hedge); (2) a hedge of future cash flows
allocable to an asset or liability in the statement of financial
position, an expected transaction or a firm commitment (cash
flow hedge); or (3) a hedge of a net investment in a foreign
operation (net investment hedge). Hedge accounting is applied
for derivatives designated in this manner provided that certain
criteria are met, including the following:
There must be formal documentation of the hedging
instrument, the hedged item, the objective of the hedge, the
hedging strategy and the hedge relationship and this must
be in place before hedge accounting may be applied;
The hedge must be expected to be effective, within 80% to
125%, in covering changes in the hedged item's fair value or
the cash flows allocable to the hedged risks during the entire
reporting period; and
The hedge must be continuously effective from the moment
of its inception.
182 Rabobank Jaarverslag 2016