Annual Report 2012 - Bank Sarasin

7.6 Swiss banking legislation
The Sarasin Group’s consolidated financial statements comply with International Financial Reporting Standards. The most important
differences between IFRS and the accounting provisions applicable to banks under Swiss law (FINMA-RS 08/2) are the following:
1. Financial assets that are available for sale
Under IFRS, financial assets available for sale are stated at fair value. Changes in fair value minus related deferred taxes are reported
under shareholders’ equity until the financial assets are sold, collected, otherwise disposed of, or are considered to be impaired. As
soon as a financial asset is classified as impaired, the cumulative unrealised loss previously reported under shareholders’ equity is
transferred to the income statement. Under Swiss law, such financial investments are stated at the lower of purchase price and
market or according to the accrual method. Any depreciation or appreciation in market value as well as any profits or losses from the
sale of such investments are reported under “other ordinary results”.
2. Financial instruments designated at fair value
Under IFRS, certain financial instruments can be specifically designated as being reported at fair value in the balance sheet. If they
are, both realised and unrealised profits and losses affect the income statement (fair value through profit or loss). This IFRS option is
not available under FINMA-RS 08/2.
3. Depreciation of goodwill
Under FINMA-RS 08/2, goodwill is subject to ordinary annual amortisation over its estimated useful life. IFRS provide for annual
impairment tests instead of ordinary amortisation of goodwill.
4. Extraordinary income and expenditure
Under FINMA-RS 08/2, income and expenditure are classified as extraordinary if they do not relate to the company or the period under
review. Under IFRS, on the other hand, almost all income and expenditure are classified as ordinary.
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