2.28 Rabobank Certificates
2.29 Trust Preferred Securities and Capital
Securities
2.30 Financial Guarantees
2.31 Segmented Information
2.32 Business Combinations
2.33 Disposal Groups Classified as Held for
Sale and Discontinued Operations
2.34 Cash Flow Statement
About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
Own issued debt securities that are repurchased are
derecognized, with the difference between the carrying amount
and the consideration paid being recognized in the income
statement.
The proceeds of the issue of Rabobank Certificates are available
to Rabobank in perpetuity and are subordinate to all liabilities and
to the Trust Preferred Securities and the Capital Securities. As the
payment of distributions is wholly discretionary, the proceeds
received and dividends paid on them are recognized in equity.
As there is no formal obligation to (re)pay the principal or to pay
a dividend, theTrust Preferred Securities and Capital Securities are
recognized as 'Equity' and dividends paid on these instruments
are recognized directly in equity.
Financial guarantee contracts require the issuer to compensate
the holder for losses incurred when the debtor fails to meet its
obligations under the terms of the related debt instrument. The
guarantees are initially recognized at fair value and subsequently
measured at the higher of the amount of the impairment
allowance and the amount initially recognized less cumulative
amortization.
A segment is a discrete operating component that is subject to
risks and returns that differfrom those of other segments or
operating components and that is viewed and managed as a
separate and discrete component for Rabobank's strategic and
operating management purposes.
Business combinations are accounted for using the acquisition
method.Thecostofan acquisition is determined as the monetary
amount (orequivalent) agreed forthe acquisition ofthe business
combination. Goodwill represents the difference between the
cost ofthe acquisition and the acquirer's share ofthe fair value
ofthe identifiable assets, liabilities and conditional assets and
liabilities acquired. Goodwill is capitalized and recognized as an
intangible asset. The non-controlling interest is also determined
as the fair value or its share ofthe identifiable net assets ofthe
company acquired. Direct acquisition costs are charged directly
to the statement of income on acquisition.
Assets that have been classified as held for sale are written down
to their fair value, reduced by the estimated costs of sale, where
this is lower than the carrying amount. An asset (or group of
assets) is classified as held for sale when it is very likely that its
economic value will be realized primarily through sale ratherthan
through continued use, the asset (or group of assets) is fully
available for sale in its current condition, management has
committed itself to a plan to sell the asset, and the sale is
expected to be completed within one year of its classification as
held for sale. If a group of assets classified as held for sale
represents a key business activity or key geographic region, it is
classified as discontinued operations and recognized outside
comprehensive income arising from continuing operations.
Cash and cash equivalents include cash resources, money market
deposits and deposits at central banks. The cash flow statement
is prepared using the indirect method and provides details ofthe
source ofthe cash and cash equivalents that became available
during the year as well as their application during the year. The
net pre-tax cash flow from operating activities is adjusted for non
cash items in the statement of income and for non-cash changes
in items in the statement of financial position.
The consolidated statement of cash flows presents separately the
cash flows from operating, investing and financing activities. Cash
flows from operating activities include net changes in loans and
advances, interbank deposits, deposits from customers and
acquisitions, disposals and repayment of financial investments.
Investment activities include acquisitions and disposals of
subsidiaries, investments in associates and property and
equipment. Financing activities include issues and repayments
of Rabobank Certificates, Trust Preferred Securities, Capital
Securities, Senior Contingent Notes, subordinated liabilities and
debt securities in issue.
The difference between the net change presented in the
statement of cash flows and the change in cash and cash
equivalents included in the statement of financial position is due
to exchange differences.
Annual Report 2018 - Consolidated Financial Statements
148
