Rothschild Bank AG Zurich - Rothschild | Private Banking & Trust

D Consolidation, Accounting
and Valuation Principles
Intangible Assets
Intangible assets acquired are stated at cost less depreciation over a measurable useful life of maximum three years.
Review and adjustments of value are carried out in the same way as with tangible assets. Small investment outlays
are charged directly to operating expenses at the time of purchase.
Derivative Instruments
Derivative financial instruments are stated at fair value. The positive and negative replacement values are
included in the balance sheet under other assets and other liabilities. Unrealised / realised gains are included in
results from trading operations. All derivative financial instruments are allocated to the trading book.
Liabilities to Pension Plans
Pension liabilities are treated according to Swiss GAAP FER 16 (accounting standard for pension benefit
obligations relevant for Swiss Banking GAAP). The employer’s contributions according to the defined
contribution pension plans are included within personnel expenses. Employer contribution reserves (prepaid
pension contributions paid by the employer) are not capitalised.
Valuation Adjustments and Provisions
Claims that a debtor is unlikely to satisfy in future are covered by individual valuation adjustments. Individual
valuation adjustments are deducted directly from the corresponding asset positions. Individual valuation
adjustments and individual provisions are made for all other recognisable loss risks according to a concept of
prudence.
Interest Income and Expense
Interest income and expense are recognised in the income statement for all interest bearing instruments on an
accrual basis.
Revenue is recognised only when it is probable that the economic benefits associated with the transaction
will flow to the entity. Interest including accrued interest that are due but unpaid for more than 90 days are
considered as being at risk and an appropriate provision is established.
Fee and Commission Income and Expense
The Group earns fee and commission income from services provided to clients. Fee income from advisory
and other services can be divided into two broad categories; fees earned from services that are provided over
a period of time, which are recognised over the period in which the service is provided; and fees that are earned
on completion of a significant act or on the occurrence of an event, such as the completion of a transaction,
which are recognised when the act is completed or the event occurs.
Revenue is recognised only when it is probable that the economic benefits associated with the transaction will
flow to the entity. Commission including accrued commission that are due and unpaid for more than 90 days
are considered as being at risk and an appropriate allowance is established.
Portfolio and other management advisory and service fees are recognised based on the applicable service
contracts. Asset management fees related to investment funds are recognised over the period the service is
provided. The same principle is applied to the recognition of income from wealth management, financial
planning and custody services that are continuously provided over an extended period of time.
Part 2
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Rothschild Bank AG Zurich