Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
The costs related to awarding equity instruments are
included in staff costs in the profit and loss account during
the employee's contract, in the year of award and the vesting
period of the equity instruments (four years in total).The liability
is recognised in other liabilities.
2.24 Tax
Current tax receivables and payables are offset if there
is a legally enforceable right to offset such items and if
simultaneous treatment or settlement is intended. Deferred tax
assets and liabilities are offset if there is a legally enforceable
right to offset such items and if they relate to the same tax
authority and arise from the same tax group.
Provisions are formed in full for deferred tax liabilities, using
the liability method, arising from temporary differences on
the reporting date between the tax bases of the assets and
liabilities and their carrying amounts for financial reporting
purposes.
The main temporary differences relate to the depreciation of
tangible fixed assets, the revaluation of certain financial assets
and liabilities, including derivatives, provisions for pensions
and other post-employment benefits, provisions for loan losses
and other impairment and tax losses, and, in connection with
business combinations, the fair values of the net assets acquired
and their tax bases. Deferred income tax assets and liabilities
are measured at the tax rates that have been enacted or
substantively enacted on the reporting date.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available, against
which the temporary differences can be utilised.
Provisions are formed in respect of taxable temporary
differences associated with investments in subsidiaries,
associates and interests in joint ventures, unless the timing of
the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in
the foreseeable future.
Taxes on profit are calculated in accordance with the tax
legislation ofthe relevant jurisdiction and recognised as
an expense in the period in which the profit is realised.The tax
effects of carrying forward unused tax losses are recognised
as an asset if it is probable that future taxable profits will be
available against which the losses can be utilised.
Deferred tax assets or deferred tax liabilities are included for the
revaluation of available-for-sale financial assets and cash flow
hedges that are directly taken to equity. Upon realisation, they
are recognised in the profit and loss account together with the
respective deferred gain or loss.
2.25 Due to banks, due to customers and debt
securities in issue
These borrowings are initially recognised at fair value i.e.
the issue price less directly allocable and non-recurring
transaction costs, and subsequently carried at amortised cost,
including transaction costs.
If Rabobank repurchases one of its own debt instruments, it
is de-recognised, with the difference between the carrying
amount of a liability and the consideration paid being
recognised in the profit and loss account.
2.26 Rabobank Certificates
The proceeds from the issue of Rabobank Certificates are
available to Rabobank Group in perpetuity and are subordinate
to all liabilities and to theTrust Preferred Securities and the
Capital Securities. As the payment of planned distributions is
fully discretionary, the proceeds from the issue of Rabobank
Certificates are recognised as equity. As a result of this, their
dividends are treated as part of equity.
2.27 Trust Preferred Securities and Capital Securities
TheTrust Preferred Securities and Capital Securities are
recognised as 'Equity' because there is no formal obligation
to (re)paythe principal or to pay the dividend. The dividends
paid on these instruments are shown as part of equity.
2.28 Financial guarantees
Financial guarantee contracts require the issuer to compensate
the holder for a loss the latter incurs because a specified debtor
fails to meet its obligations in accordance with the terms of
a debt security. Such financial guarantees are recognised the
first time at fair value and subsequently at the value ofthe
discounted obligation. Under the guarantee or the higher value
the first time, the amount is reduced by the already recognised
cumulative result to show the accounting principles for
the income.
2.29 Segmented information
A segment is a distinguishable component of Rabobank that
engages in providing products or services and is subject to risks
and returns that are different from those of other segments.
This means that they are segments with different risks and
returns which are reviewed as part ofthe strategic management
of Rabobank and for the purpose of making business decisions.
The primary reporting format for Rabobank is the business
segment, followed by the geographical segment.
190 Rabobank Annual Report 2015
