UniCredit Bank AG

Financial Statements (2) | Consolidated Financial Statements
Accounting and Valuation (CONTINUED)
We only made use of the provision set forth in IAS 40.32A for a defined portfolio of investment property until 30 September 2009. This regulation allows
an entity to measure at fair value through profit or loss any investment properties whose fair value determines the extent of the repayment of liabilities
linked to the investment properties, even if all other investment property is measured at amortised cost.
The fair values stated for this defined portfolio of investment properties were determined as part of an appraisal performed by external experts compliant
with Section 194 of the German Building Code (Baugesetzbuch – BauGB). This involved determining fair values on the basis of sustainable rents. When
these values were determined, non-recurring effects were taken into account such as differences between contractual rents and sustainable rents.
Current expenses and rental income from investment property is disclosed in net other expenses/income. Scheduled depreciation on such investments
carried at amortised cost is included in operating expenses, whereas impairments are recognised in net income from investments. Changes in the value
of investments carried at fair value through profit or loss are similarly included in net income from investments. No scheduled depreciation is recognised
for these instruments as they are measured at fair value.
18 Intangible assets
The main items included in intangible assets are goodwill arising from the acquisition of fully consolidated subsidiaries and software. An intangible asset
shall only be recognised if it is probable that the expected future economic benefits attributable to the asset will flow to the entity and the cost of the asset
can be measured reliably. Compliant with IAS 36, depreciation is no longer taken on goodwill. The value of goodwill is tested annually and where there is
an indication of impairment. Impairments are taken where necessary. Software is valued at amortised cost and written down over an expected useful life
of three to five years. All other intangible assets are amortised over a period of up to ten years, as they have a limited useful life.
19 Assets of discontinued operations and non-current assets or disposal groups held for sale
Under IFRS 5, assets of discontinued operations and non-current assets or disposal groups held for sale are carried at the lower of the carrying amount or
fair value less costs to sell at the balance sheet date.
20 Liabilities
Deposits from banks and customers, and debt securities in issue that are not hedged items of an effective micro fair value hedge are reported at amortised
cost.
21 Financial liabilities held for trading
This item includes the negative market values of traded derivatives and all other derivatives that are not classified as hedging derivatives (which are
recognised separately). Also included here are warrants, certificates and bonds issued by our trading department as well as delivery obligations arising
from short sales of securities held-for-trading purposes.
Financial liabilities held for trading are carried at fair value. Gains and losses arising from the valuation and realisation of financial liabilities held for
trading are taken to the income statement under net trading income.
We act as market maker for the structured products we issue.
22 Hedge adjustment of hedged items in the fair value hedge portfolio
Net changes in the value of the hedged amount of hedged items are carried in this hedge adjustment of the fair value hedge portfolio to be shown separately
(see Note 65). The hedge adjustments have been recognised on a gross basis in the balance sheet for one subsidiary for which asset and liability
holdings can be hedged separately.
23 Other liabilities
Compliant with IAS 37, accruals and other items are shown under other liabilities. These reflect future expenditure of uncertain timing or amount, but
the uncertainty is much less than for provisions. Accruals are liabilities for goods and services provided or received that have been neither paid for nor
invoiced by the supplier nor formally agreed. This also includes current liabilities to employees, such as flexi-time credits and outstanding vacation.
Accruals are carried at the amount likely to be used.
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108 2009 Annual Report · HypoVereinsbank