Bilansi uspjeha - Raiffeisen Bank

Notes to the financial statements
31 December 2005 and 2004
(all amounts are expressed in thousands of KM)
Interest Income and Expense
Interest income and expense are recognized in the income statement for all interest bearing instruments on a time
proportion basis that takes into account the effective yield on the assets. Interest revenue includes the amount of
amortization of any discount, premium or other difference between the initial carrying amount of a debt security and
its amount at maturity including any material loan origination fees.
Interest charged on deposits is added to the principal where this is foreseen by the agreement. Interest income is
suspended when it is considered that recovery of the income is unlikely. Suspended interest is recognized as income
when collected.
Fee and commission income and expense
Fees and commissions consist mainly of fees earned on domestic and foreign payment transactions, and fees for
loans and other credit instruments issued by the Bank.
Fees for payment transactions are recognised in the period when services are rendered.
Loan origination fees, after approval and drawdown of loans, are deferred (together with related direct costs) and
recognized as an adjustment to the effective yield of the loan over its life (from 1 January 2005).
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax expense is based on taxable income for the year. Taxable income differs from net income as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using
tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for
all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority
and the Bank has the ability and intention to settle on a net basis.
The Bank is subject to various indirect taxes which are included in administrative expenses.
Financial statement
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