entire - Deutsche Bank Annual Report 2012

Deutsche Bank 02 – Consolidated Financial Statements 159
Financial Report 2010 Notes to the Consolidated Financial Statements
01 – Significant Accounting Policies
Assignment of Revenue Components in CIB
The presentation of prior period CIB revenues was adjusted during the first half of 2010 following a review of
the assignment of specific revenue components to the product categories. The review resulted in a transfer of
negative revenues of € 325 million and revenues of € 97 million from Loan Products to Sales & Trading (debt and
other products) in 2009 and 2008, respectively. In addition, Sales & Trading (equity) revenues were reduced by
€ 83 million in 2009 and € 105 million in 2008, respectively, with corresponding offsetting effects in Sales &
Trading (debt and other products). These adjustments had no impact on CIB’s total revenues.
Insurance
During the second quarter 2010, the Group changed the presentation of the fees and net settlements associated
with longevity insurance and reinsurance contracts. It was determined that the net presentation of cash flows
under individual longevity insurance and reinsurance contracts reflected the actual settlement of those cash
flows and therefore better reflected the nature of such contracts. This change in presentation resulted in a transfer
of € 117 million of expenses from Other income to Policyholder benefits and claims in 2010.
Software Amortization Periods
In the second quarter 2010, the Group changed the amortization periods for capitalized costs relating to certain
purchased or internally developed software from three years to five or ten years. The change did not have a
material impact on the Group’s consolidated financial statements in 2010.
Allowance for Loan Losses
The Group applies estimates in determining the allowance for loan losses in its homogeneous loan portfolio
which use statistical models based on historical experience. On a regular basis the Group performs procedures
to align input parameters and model assumptions with historically evidenced loss levels. Alignment of input
parameters and model assumptions in 2009 led to a lower level of provisions for credit losses of € 28 million
and € 145.8 million in 2010 and 2009, respectively.
Change in the Functional Currency of a Significant Operation
On January 1, 2010, the functional currency of Deutsche Bank Aktiengesellschaft London Branch (‘London
Branch’) and certain other London-based subsidiaries was changed from pound sterling to euro.
These entities’ functional currency had previously been determined to be pound sterling on the basis that the
currency of their primary economic environment was based on pound sterling. However during 2009 it was
determined that the London Branch’s operating environment, mix of business and balance sheet composition
had gradually changed over time. To better reflect this change, London Branch management undertook to
manage their operations in euro from January 1, 2010. To implement this decision, procedures were put in
place for London Branch to hedge all non-euro exposures, sell profits into euro and report internally in euro.