Annual Report 2011 LGT Bank in Liechtenstein Ltd., Vaduz

14
Cash and cash equivalents, debt instruments of
public authorities and bills which are eligible for
refinancing at central banks, and claims on banks
Cash and cash equivalents and claims on banks are
reported in the balance sheet at par value. Registered
money market claims, rescriptions and treasury certificates
are reported inclusive of amortized discounts.
Due from clients
Non-impaired claims against clients are reported in the
balance sheet at nominal value. Impaired claims, i.e.
claims where it appears unlikely that the debtor will be
able to meet his future obligations, are valued on an
individual basis and the decrease in value is covered by
specific value adjustments. Loans are rated as impaired
at the latest if the contractual payments for capital
and/or interest have been outstanding for more than
90 days. Interest which has been outstan ding for more
than 90 days is regarded as overdue. Overdue interest
and interest which is in danger of not being received,
is no longer recovered but is instead allocated to value
adjustments.
The decrease in value is measured according to the difference
between the book value of the claim and the
probable recoverable amount, taking account of the
estimated net present value on the balance sheet date.
The net present value calculation is based on the current
interest rate of the claim and the expected dates of the
future incoming payments. Specific value adjustments
are deducted directly from the corresponding claims.
In addition to the specific value adjustments, the bank
makes portfolio value adjustments to cover any latent
default risks present on the balance sheet date. In this
connection, equivalent claims not entitled to specific
value adjustments are grouped together (portfolios).
A calculation model is then applied to each portfolio to
determine the necessary portfolio value adjustments as
soon as a latent credit risk is signalled by predetermined
indicators. Portfolio value adjustments are offset against
the corresponding claims. Changes to the portfolio value
adjustments are entered in the profit and loss account.
Appendix to the financial statement
Impaired claims are reclassified as performing if the
outstanding capital amounts and interest are again
paid within the specified period under contractual
agreements.
Trading positions comprising securities and
precious metals
Trading positions are valued at the market value on the
balance sheet date. For positions which are not traded
on a recognized exchange or for which there is no
representative market, valuation is carried out at the
lower of cost or market.
Securities and precious metals held as current
and non-current assets
Current assets are valued at the lower of cost or market.
Money market papers are measured at amortized cost.
Fixed-interest bearing securities assigned to non-current
assets are reported in the balance sheet at the repayment
amount. Premiums and discounts which have not
yet been amortized are reported as accrued items. Only
those debt instruments which are kept until maturity
are recorded as non-current assets.
Precious metals held as current assets are valued at
the market value on the balance sheet date. Precious
metals held as non-current assets are reported at cost
minus necessary value adjustments.
Shares in affiliated companies and participations
Shares in affiliated companies and participations are
valued at cost, taking into account necessary value
adjustments.
Shares in infrastructure companies are also reported in
the balance sheet under participations. These items are
insignificant in capital and voting shares.
Subordinated loans to affiliated companies are reported
at the nominal value.