(Thai) Annual Report 2005 - United Overseas Bank

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(Thai) Annual Report 2005 - United Overseas Bank

Outstanding forward foreign exchange contracts are marked to market by comparing contract rates to

forward rates established by the Bank for contracts with similar maturity. At the balance sheet date, the unrealised

gains or losses on outstanding forward foreign exchange contracts, calculated as described above, are included

within other assets or other liabilities in the balance sheet.

All foreign exchange gains or losses are recognised in the statement of earnings.

4.10 Derivatives

Forward foreign exchange contracts and options are marked to market using the market rates as at the balance

sheet date. Cross currency interest rate swaps, interest rate swaps and forward rate agreement, the net present

value method is used.

Derivative contracts are recorded as off-balance sheet transactions and the changes in fair value are recorded in

the statements of earnings.

4.11 Properties foreclosed

Properties foreclosed of the Bank and a subsidiary are stated at the lower of cost or market value. Market value is

determined by using the latest appraisal value. Properties foreclosed which have been received as a result of an asset

swap are recorded at the lower of the legally claimable value of the loan or the latest market value of the property

foreclosed.

Losses on impairment are charged to the statement of earnings. Gains or losses on the sale of properties foreclosed

are recognised only when such properties are sold.

4.12 Premises and equipment

Land is stated at cost or revaluation. Premises is stated at cost or revaluation less accumulated depreciation. Equipment

is stated at cost less accumulated depreciation. Premises and equipment acquired as a result of merger are stated at

their book value on the transfer date which is regarded as the new acquisition cost, less accumulated depreciation

and allowance for impairment (if any).

Depreciation is calculated by the straight-line method, based on the estimated useful lives of the assets, as follows :

Premises

Equipment

50 years

5 years

No depreciation is determined for land and assets under construction and installation.

40 United Overseas Bank (Thai) Public Company Limited

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