Bilansi uspjeha - Raiffeisen Bank

Notes to the financial statements
31 December 2005 and 2004
(all amounts are expressed in thousands of KM)
Foreign currency translation
Transactions in currencies other than Bosnia and Herzegovina KM are initially recorded at the rates of exchange
prevailing on the dates of the transactions. Monetary assets and liabilities are translated at the rates prevailing on
the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated. Profits and losses arising on translation
are included in the statement of income for the period.
The Bank values its assets and liabilities by middle rate of Central Bank of Bosnia and Herzegovina valid at the date
of balance sheet. The principal rates of exchange set forth by the Central Bank and used in the preparation of the
Bank’s balance sheet at the reporting dates were as follows:
31 December 2005 EUR 1= KM 1.95583 USD 1=KM 1.657905
31 December 2004 EUR 1= KM 1.95583 USD 1=KM 1.437687
Off-balance sheet commitments
In the ordinary course of business, the Bank enters into credit related commitments which are recorded in off-balance
sheet accounts and primarily include guarantees, letters of credit and undrawn loan commitments. Such financial
commitments are recorded in the Bank’s balance sheet if and when they become payable.
Provisions
Provisions for are recognised when the Bank has a present obligation as a result of a past event, and it is probable
that the Bank will be required to settle that obligation. Management Board estimates the provisions based at the best
estimate of expenditure to settle the Bank’s obligation. Provisions are discounted to present value where the effect is
material.
Reclassification
Certain amounts in the previous year financial statements have been reclassified to conform with the current year
presentation.
Regulatory requirements
The Bank is subject to the regulatory requirements of the Federal Banking Agency. These regulations include limits
and other restrictions pertaining to minimum capital adequacy requirements, classification of loans and off balance
sheet commitments and forming allowances to cover credit risk, liquidity, interest rate and foreign currency position.
At year end the Bank was substantially in compliance with all regulatory requirements.
Financial statement
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