entire - Deutsche Bank Annual Report 2012

Deutsche Bank 02 – Consolidated Financial Statements 160
Financial Report 2010 Notes to the Consolidated Financial Statements
01 – Significant Accounting Policies
The effect of the change in functional currency to euro was applied prospectively in these consolidated financial
statements. The Group translated all items into the new functional currency using the exchange rate as at
January 1, 2010. Exchange differences arising from the translation of the foreign operation previously recorded
in other comprehensive income were not reclassified to profit or loss and remain in other comprehensive income
until the entities are disposed of or sold.
Significant Accounting Policies
The following is a description of the significant accounting policies of the Group. Other than as previously
described, these policies have been consistently applied for 2008, 2009 and 2010.
Principles of Consolidation
The financial information in the consolidated financial statements includes that for the parent company, Deutsche
Bank AG, together with its subsidiaries, including certain special purpose entities (“SPEs”), presented as a
single economic unit.
Subsidiaries
The Group’s subsidiaries are those entities which it controls. The Group controls entities when it has the power
to govern the financial and operating policies of the entity, generally accompanying a shareholding, either
directly or indirectly, of more than one half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered in assessing whether the Group controls an
entity.
The Group sponsors the formation of SPEs and interacts with non-sponsored SPEs for a variety of reasons,
including allowing clients to hold investments in separate legal entities, allowing clients to invest jointly in
alternative assets, for asset securitization transactions, and for buying or selling credit protection. When
assessing whether to consolidate an SPE, the Group evaluates a range of factors, including whether (1) the
activities of the SPE are being conducted on behalf of the Group according to its specific business needs so
that the Group obtains the benefits from the SPE’s operations, (2) the Group has decision-making powers to
obtain the majority of the benefits, (3) the Group obtains the majority of the benefits of the activities of the
SPE, or (4) the Group retains the majority of the residual ownership risks related to the assets in order to
obtain the benefits from its activities. The Group consolidates an SPE if an assessment of the relevant factors
indicates that it controls the SPE.
Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer
consolidated from the date that control ceases.
The Group reassesses consolidation status at least at every quarterly reporting date. Therefore, any changes
in structure are considered when they occur. This includes changes to any contractual arrangements the
Group has, including those newly executed with the entity, and is not only limited to changes in ownership.