entire - Deutsche Bank Annual Report 2012

Deutsche Bank 02 – Consolidated Financial Statements 188
Financial Report 2010 Notes to the Consolidated Financial Statements
02 – Critical Accounting Estimates
As this amount represents fair value, the liabilities have been classified as financial liabilities at fair value
through profit or loss. Deposits collected under investment contracts are accounted for as an adjustment to the
investment contract liabilities. Investment income attributable to investment contracts is included in the
consolidated statement of income. Investment contract claims reflect the excess of amounts paid over the
account balance released. Investment contract policyholders are charged fees for policy administration,
investment management, surrenders or other contract services.
The financial assets for investment contracts are recorded at fair value with changes in fair value, and offsetting
changes in the fair value of the corresponding financial liabilities, recorded in profit or loss.
Reinsurance
Premiums ceded for reinsurance and reinsurance recoveries on policyholder benefits and claims incurred are
reported in income and expense as appropriate. Assets and liabilities related to reinsurance are reported on a
gross basis when material. Amounts ceded to reinsurers from reserves for insurance contracts are estimated in
a manner consistent with the reinsured risk. Accordingly, revenues and expenses related to reinsurance
agreements are recognized in a manner consistent with the underlying risk of the business reinsured.
02 –
Critical Accounting Estimates
Certain of the accounting policies described in Note 01 “Significant Accounting Policies” require critical
accounting estimates that involve complex and subjective judgments and the use of assumptions, some of
which may be for matters that are inherently uncertain and susceptible to change. Such critical accounting
estimates could change from period to period and have a material impact on the Group’s financial condition,
changes in financial condition or results of operations. Critical accounting estimates could also involve
estimates where management could have reasonably used another estimate in the current accounting period.
The Group has identified the following significant accounting policies that involve critical accounting estimates.
Fair Value Estimates
Certain of the Group’s financial instruments are carried at fair value with changes in fair value recognized in the
consolidated statement of income. This includes trading assets and liabilities and financial assets and liabilities
designated at fair value through profit or loss. In addition, financial assets that are classified as AFS are carried
at fair value with the changes in fair value reported in other comprehensive income. Derivatives held for nontrading
purposes are carried at fair value with changes in value recognized through the consolidated statement
of income, except where they are designated in cash flow or net investment hedge accounting relationships
when changes in fair value of the effective portion of the hedge are reflected directly in other comprehensive
income.