Bilansi uspjeha - Raiffeisen Bank

Notes to the financial statements
31 December 2005 and 2004
(all amounts are expressed in thousands of KM)
Financial assets and liabilities (continued)
Objective evidence of impairment for financial assets assessed collectively for impairment are the adverse changes
in the payment status of borrowers in the group (e.g. an increased number of delayed payments) or national or local
economic conditions that correlate with defaults on the assets in the group.
When a loan is uncollectible, it is written off against the related allowance for impairment; subsequent recoveries are
credited to the ‘Impairment losses on loans and advances’ line in the income statement.
The Bank charges penalty interest to borrowers when a portion of the loan falls overdue. Penalty interest is accounted
for on a cash received basis in the caption ‘Interest income’.
Purchased loans held to maturity
Purchased loans held to maturity comprise the loan portfolio purchased from USAID Business Finance as described in
Note 18. The Bank has intention and ability to hold this portfolio till maturity of each loan. Assets held to maturity are
recognized at cost and carried at amortized cost using the effective yield method, less any provision for impairment.
Property and equipment
Property and equipment are started at cost less accumulated depreciation and accumulated impairment losses, if
any. Cost includes the purchase price and directly associated cost of bringing the asset to a working condition for
its intended use. Maintenance and repairs, replacements and improvements of minor importance are expensed as
incurred. Significant improvements and replacement of assets are capitalised. Gains or losses on the retirement or
disposal of property and equipment are included in the statement of income in the period in which they occur.
Properties in the course of construction are carried at cost, less impairment loss, if any. Depreciation commences when
the assets are ready for their intended use. Depreciation is calculated on a straight-line basis over the estimated useful
life of the applicable assets and based upon the application of the following annual percentages to historical costs:
2005 2004
Buildings 1.3% 1.3%
Furniture and vehicles 11%-15.5% 11%-15.5%
Computers 33.3% 33.3%
Other equipment 7%-20% 7%-20%
Intangible assets 20% 20%
Financial statement
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