Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
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
in millions of euros
On 31 December 2017
Assets
Financial assets held for trading
Financial assets designated at
fair value
Derivatives
Available-for-sale financial assets
Liabilities
Derivatives
Financial liabilities designated at
fair value
On 31 December 2016
Assets
Financial assets held for trading
Financial assets designated at
fair value
Derivatives
Available-for-sale financial assets
Liabilities
Derivatives
Financial liabilities designated at
fair value
Instruments
held at the end
of reporting
Instruments not
held any more
at the end of
period reporting period Total
(3)
37
61
(22)
52
(1)
(10)
(37)
229
(1)
(11)
(6)
(1)
17
191
19
(3)
42
50
(22)
46
(1)
(11)
(20)
420
18
(1)
289 527
(1)
Recognition of Day 7 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).
There are no deferred day 1 gains as at 31 December 2017.
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 cases 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 reliable 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 overfifty 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 advisors 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
risks where the occurrence ofa loss may not be probable, but
is not improbable either, and for which no provisions have
been recognised. For those cases where (a) the possibility of
an outflow of funds is not probable but also not remote or (b)
the possibility of an outflow of funds is more likely than not
but the potential loss cannot be estimated reliably, a contingent
liability is shown.
Rabobank Annual Report 2017 - Consolidated financial statements
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