2.25 Variable Remuneration Based on Equity
Instruments
2.26 Tax
2.27 Deposits from Credit Institutions,
Deposits from Customers and Debt
Securities in Issue
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Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
that approximate those of the corresponding obligation. The
majority of pension plans are career-average plans. The costs of
these plans (being the net pension charge for the period after
deducting employee contributions and interest) are included
under'Staff costs'. Net interest expense/income is determined by
applying the discount rate at the beginning of the reporting
period to the asset or liability of the defined benefit pension plan.
Actuarial gains and losses arising from events and/or changes in
actuarial assumptions are recognized in the statement of
comprehensive income.
Defined Contribution Plans
Under defined contribution plans, contributions are paid into
publicly or privately managed pension insurance plans on a
compulsory, contractual or voluntary basis. These regular
contributions are recognized as expense in the year in which they
are due and they are included under 'Staff costs'.
Other Post-employment Obligations
Some of Rabobank's business units provide other post-
employment benefits. To become eligible for such benefits, the
usual requirement is that the employee remains in service until
retirement and has been with the company for a minimum
number of years. The expected costs of these benefits are accrued
during the years of service, based on a system similar to that for
defined benefit pension plans.The obligations are calculated
annually by independent actuaries.
Variable Remuneration
Variable remuneration payable unconditionally and in cash is
recognized in the year in which the employee renders the
service. Conditional cash remuneration is included, on a straight
line basis, in staff costs in the statement of income over the period
of the year in which the employee's services are received and the
remaining three years of the vesting period (i.e. over four years).
The liability is recognized in 'Other liabilities'.The accounting
treatment of payments based on equity instruments is disclosed
in Section 2.25.
For certain identified staff, remuneration for services rendered is
settled in the form of cash payments based on equity
instruments that are similar to, and have the same characteristics
as, Rabobank Certificates. The costs of the services received are
based on the fair value of the equity instruments on the award
date and are restated annually to fair value. The costs related to
the award of equity instruments during the period ofthe
employee's contract are included in staff costs in the statement
of income overthe period ofthe year of award and the remaining
three years ofthe vesting period ofthe equity instruments (i.e.
over four years). The liability is recognized in 'Other liabilities'.
Current tax receivables and payables are offset where there is a
legally enforceable right to offset and where simultaneous
treatment or settlement is intended. Deferred tax assets and
liabilities are offset where there is a legally enforceable right to
offset and where they relate to the same tax authority and arise
within the same taxable entity.
Deferred income tax is provided, using the liability method, on
temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes. These temporary differences arise primarily on
depreciation of tangible fixed assets, revaluation of certain
financial assets and liabilities (including derivatives), employee
benefits, loan impairment allowances and other impairments, tax
losses and fair value adjustments to net assets acquired in
business combinations. Deferred tax assets and liabilities are also
recognized on the revaluation of financial assets at fair value
through other comprehensive income and cash flow hedges that
are taken directly to other comprehensive income. When realized,
they are recognized in the income statement at the same time
as the respective deferred gain or loss is recognized. Deferred tax
assets are recognized to the extent that it is probable that future
taxable profits will be available against which the losses can be
utilized and are measured at the tax rates that have been enacted
or substantively enacted as at the reporting date. Rabobank
considers all deferred taxes to be non-current.
Taxes on profit are calculated in accordance with the tax
legislation ofthe relevant jurisdictions in which Rabobank
operates and are recognized as an expense in the period in which
the profit is realized. The tax effects of loss carry forwards are
recognized as an asset if it is probable that future taxable profits
will be available against which the losses can be utilized.
These liabilities are initially recognized at fair value, being the
issue price less directly allocable and non-recurring transaction
costs, and thereafter at amortized cost including transaction
costs.
Annual Report 2018 - Consolidated Financial Statements
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