- - - Inhoudsopgave Voorwoord Bestuursverslag Corporate governance The amount in total gains or losses recognised in the income statement for the period relating to the assets and liabilities held in Level 3 until the end of the reporting period is given in the following table. Fair value changes for financial instruments in level 3 recognised in profit or loss Instruments not held Instruments held at the end anymore at the end of in millions of euros of reporting period reporting period Total On 31 December 2016 Assets Financial assets held for trading (10) (1) (11) Financial assets designated at fair value (37) 17 (20) Derivatives 229 191 420 Available-for-sale financial assets (1) 19 18 Liabilities Derivatives 238 289 527 Financial liabilities designated at fair value (1) (1) On 31 December 2015 Assets Financial assets held for trading 1 (1) Financial assets designated at fair value 168 12 180 Derivatives 95 345 440 Available-for-sale financial assets 28 115 143 Liabilities Derivatives 119 351 470 Financial liabilities designated at fair value 3 (1) 2 Recognition of Day 1 gains When using fair value accounting at the inception of a financial instrument, any positive difference between the transaction price and the fair value (referred to as day 1 gains') is accounted for in the statement of income where the valuation method is based on observable inputs from active markets. In all other cases, the entire day 1 gain is deferred and after initial recognition the deferred day 1 gain is recognised as a gain to the extent it results from a change in a factor (including time effects). The table below summarises the changes of the deferred day 1 gains during the year: Provision for Day 1 gains In millions of euros 2016 2015 Opening balance 3 6 Additions Amortisation (3) (2) Changes (1) Closing balance 3 Consolidated Financial Statements Company Financial Statements Pillar 3 4.10 Legal and arbitration proceedings Rabobank Group is active in a legal and regulatory environment that exposes it to substantial risk of litigation. As a result, Rabobank Group is involved in legal cases, arbitrations and regulatory proceedings in the Netherlands and in other countries, including the United States.The most relevant legal and regulatory claims which could give rise to liability on the part of Rabobank Group are described below. If it appears necessary on the basis of the applicable reporting criteria, provisions are made based on current information; similar types of case are grouped together and some cases may also consist ofa number of claims. The estimated loss for each individual case (for which it is possible to make a realistic estimate) is not reported, because Rabobank Group feels that information of this type could be detrimental to the outcome of individual cases. When determining which of the claims is more likely than not (i.e., with a likelihood of over fifty percent) to lead to an outflow of funds, Rabobank Group takes several factors into account.These include (but are not limited to) the type of claim and the underlying facts; the procedural process and history of each case; rulings from legal and arbitration bodies; Rabobank Group's experience and that of third parties in similar cases (if known); previous settlement discussions; third- party settlements in similar cases (where known); available indemnities; and the advice and opinions of legal advisers and other experts. The estimated potential losses, and the existing provisions, are based on the information available at the time and are forthe main part subject to judgements and a number of different assumptions, variables and known and unknown uncertainties.These uncertainties may include the inaccuracy or incompleteness of the information available to Rabobank Group (especially in the early stages ofa case). In addition, assumptions made by Rabobank Group about the future rulings of legal or other instances or the likely actions or attitudes of supervisory bodies or the parties opposing Rabobank Group may turn out to be incorrect. Furthermore, estimates of potential losses relating to the legal disputes are often impossible to process using statistical or other quantitative analysis instruments that are generally used to make judgements and estimates. They are then subject to a still greater level of uncertainly than many other areas where the group needs to make judgements and estimates. The group of cases for which Rabobank Group determines that the risk of future outflows of funds is higher than fifty percent varies over time, as do the number of cases for which the bank can estimate the potential loss. In practice the end results could turn out considerably higher or lower than the estimates of potential losses in those cases where an estimate was made. Rabobank Group can also sustain losses from legal 208 Rabobank Jaarverslag 2016

Rabobank Bronnenarchief

Jaarverslagen Rabobank | 2016 | | pagina 209