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Business combinations
Consolidation procedures
Foreign currency translation
Cash and cash equivalents
results of its operations. The consolidated financial statements of Bank Austria Creditanstalt
in accordance withe IFRSs are based on the separate financial statements of all consolidated
companies prepared on a uniform basis.
Material investments in associated companies, i.e., companies which are neither indirectly
nor directly controlled by Bank Austria Creditanstalt AG but in which it can exercise a significant
influence, are accounted for using the equity method.
Shares in all other companies are classified as investments available for sale and recognised
at their fair values, to the extent that fair value is reliably measurable.
The method of inclusion in the consolidated financial statements is shown in the list of
selected subsidiaries and equity interests displayed in note 39.
When a subsidiary is acquired, the fair values of its identifiable assets, including identifiable
intangible assets, and liabilities are offset against the cost of acquisition. The difference
between the cost of acquisition and the fair value of net assets is recognised in the
balance sheet as goodwill if such difference cannot be attributed to intangible assets.
Pursuant to the new IFRS 3 and IAS 36, goodwill is not amortised. Goodwill arising on
business combinations after 1 April 2004 is stated in the currency of the acquired company
and translated at the closing rate. The cash-generating units test goodwill for
impairment at least once a year.
As at the date of acquisition, shareholders’ equity of foreign subsidiaries is translated into
euros. Gains and losses arising on the foreign currency translation of shareholders’ equity
of foreign subsidiaries are recorded directly in shareholders’ equity as at the subsequent
balance sheet dates.
Goodwill arising on acquisitions of subsidiaries and other equity interests before
1 January 1995 has been offset against retained earnings.
When a subsidiary is acquired, the calculation of minority interests is based on the fair
values of assets and liabilities.
Intragroup receivables, liabilities, expenses and income are eliminated unless they are
immaterial. Intragroup profits are also eliminated.
Foreign currency translation is performed in accordance with IAS 21. Monetary assets and
liabilities denominated in currencies other than the euro are translated into euros at market
exchange rates prevailing at the balance sheet date. Forward foreign exchange transactions
not yet settled are translated at the forward rate prevailing at the balance sheet
date.
For the purpose of foreign currency translation of the financial statements of foreign subsidiaries,
which are prepared in a currency other than the euro, the middle exchange rate
prevailing at the balance sheet date has been applied to balance sheet items and the
annual average exchange rate has been applied to income statement items.
The amount of cash and cash equivalents stated in the cash flow statement includes the
cash holdings of non-current assets classified as held for sale.
Significant accounting principles 119