Rothschild Bank AG Zurich - Rothschild | Private Banking & Trust

D Consolidation, Accounting
and Valuation Principles
Cash, Due from and to Banks, Due to Customers and Money Market
Instruments
Assets and liabilities are stated in the balance sheet at their notional value.
Due from Customers
Due from customers are stated in the balance sheet at their notional value. Claims – taking all off-balance sheet
items into account – which the debtor will be unlikely to satisfy in future are covered by individual provisions.
These are classified as non-performing if interest and capital payments are overdue for more than 90 days.
Individual provisions are deducted directly from the corresponding asset positions.
Claims rated as uncollectible are written off against the individual provisions made.
Trading Portfolios in Securities and Precious Metals
Securities and precious metals in trading portfolios are in principle stated at the fair value. The price obtained on
a price-efficient and liquid market is taken as the fair value, which as a rule corresponds to the market value.
If in exceptional cases there is no fair value available, securities and precious metals in trading portfolios will
be valued and stated at the lower of cost or market.
Interest, discount, and dividend income from trading securities are set off against refinancing expenses and
booked as income from trading operations.
Financial Investments
Fixed income securities that are planned to be held until maturity are valued by the accrual method. Premiums
and discounts are amortised over the remaining life of the respective security and are recognised in interest
and dividend income on financial investments. Other financial investments are valued at the lower of cost or
market value.
Non-Consolidated Participations
An associate is an entity in which the Group has significant influence, but no control over the operating and
financial management policy decisions. This is generally demonstrated by the Group holding in excess of 20%,
but no more than 50%, of the voting rights. The Group’s investments in associates are initially recorded at
cost. Subsequently their value is increased or decreased by the Group’s share of the post-acquisition profit or
loss, or by other movements reflected directly in the equity of the associate. When the Group’s share of losses
in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless
it has incurred obligations or made payments on behalf of the associate.
All other participations without a significant influence are stated at cost less necessary depreciation.
Fixed Assets
Fixed assets are valued at cost less depreciation over an expected useful lifetime of maximum ten years for fitout
costs and maximum six years for other tangible fixed assets and maximum three years for IT assets. Bank
buildings and other properties are depreciated to a base level generally accepted by the tax authorities. The
value is reviewed on a regular basis. If a review reveals an impairment in value, and additional, unscheduled
write-off is made. The remaining book value is subsequently written down over the residual useful lifetime. If
the review reveals a change in the useful lifetime, the remaining book value is written down as planned over
the adjusted useful life. Small investment outlays are charged directly to operating expenses at the time of
purchase.
Part 2
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Rothschild Bank AG Zurich