Inhoudsopgave Voorwoord Bestuursverslag Corporate governance identified as impaired within the bank's risk systems (IBNR; incurred but not reported). Basel II parameters, adjusted to the IFRS guidelines and to current developments, are used to determine the provision, together with what is known as the Loss Identification Period (LIP), the period between the occurrence of a loss event and the recording of the event in the bank's risk systems.The LIP is expressed in months and varies between portfolios. Exposures classified as corporate exposures under Capital Requirements Directive CRD IV are measured in accordance with the 'one debtor' principle. This principle requires that the approved limit for a debtor applies to the sum of all exposures (including derivatives, guarantees and the like) of the debtor group into which the debtor has been classified. Debtor groups include all debtors that are part of the economic entity with which the borrower is affiliated, including any majority shareholders ofthe economic entity.The 'one debtor' principle applies across all entities and group divisions. 2.16 Goodwill and other intangible assets Goodwill Goodwill is the amount by which the acquisition price paid for a subsidiary exceeds the fair value on the date on which the share of net assets and contingent liabilities ofthe entity was acquired. With each acquisition, the other non-controlling interests are recognised at fair value or at its share ofthe identifiable assets and liabilities ofthe acquired entity.Tests are performed annually, or more frequently if indications so dictate, to determine whether there has been impairment. Other intangible assets, including software development costs Costs directly incurred in connection with identifiable and unique software products over which Rabobank has control and that will likely provide economic benefits exceeding the costs for longer than one year are recognised as other intangible assets. Direct costs include the personnel costs ofthe software development team, financing costs and an appropriate portion ofthe relevant overhead. Expenditures that improve the performance of software as compared with their original specifications are added to the original cost ofthe software. Software development costs are recognised as other intangible assets and amortised on a linear basis over a period not exceeding five years. Costs related to the maintenance of software are recognised as an expense at the time they are incurred. Other intangible assets also include those identified through business combinations, and they are amortised over their expected useful lives. Consolidated Financial Statements Company Financial Statements Pillar 3 Impairment losses on goodwill Goodwill is allocated to cash-generating units for the purpose of impairment testing, which is undertaken at the lowest level of assets that generate largely independent cash inflows. During the fourth quarter of each financial year, or more frequently if there are indications of impairment, goodwill is tested for impairment and any excess of carrying amount over recoverable amount is provided.The recoverable amount is the higher ofthe value in use and the fair value less selling costs. The value in use of a cash flow generating unit is determined as the present value ofthe expected future pre-tax cash flows of the cash flow generating unit in question. The key assumptions used in the cash flow model depend on the input data and they reflect various judgemental financial and economic variables, such as risk-free interest rates and premiums reflecting the risk inherent in the entity concerned. Impairments of goodwill are included under 'Impairment losses on goodwill' in the statement of income. Impairment losses on other intangible assets At each reporting date, an assessment is made as to whether there are indications of impairment of other intangible assets. If there are such indications, impairment testing is carried out to determine whether the carrying amount ofthe other intangible assets is fully recoverable.The recoverable amount shall be estimated for the individual asset. If it is not possible to estimate the recoverable amount ofthe individual asset, the recoverable amount ofthe cash generating unit to which the asset belongs is determined. An impairment loss is recognised if the carrying amount exceeds the recoverable amount. Impairment losses and impairment reversals are included in 'Other administrative expenses'in the statement of income. 2.17 Property and equipment Property and equipment for own use Property for own use consists mainly of office buildings and is recognised at cost less accumulated depreciation and impairment, as is equipment for own use. Assets are depreciated to their residual values over the following estimated useful lives: Property - Land Not depreciated - Buildings 25 -40 years Equipment - Computer equipment 1 - 5 years - Other equipment and vehicles 3 - 8 years An annual assessment is made as to whether there are indications of impairment of property and equipment. If the carrying amount of an asset exceeds its estimated recoverable amount, the carrying amount is written down to 187 Notes to the consolidated financial statements

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Jaarverslagen Rabobank | 2016 | | pagina 188