Annual Report 2012 - Raiffeisen Bank Kosovo JSC

A parent need not present consolidated financial statements if the parent is itself a wholly-owned subsidiary and the
ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that
comply with International Financial Reporting Standards. The Bank prepares separate financial statements in accordance
with IFRS. Interests in subsidiaries are accounted for at cost in the separate financial statements.
3.2. Foreign Currencies transactions
Foreign exchange transactions are recorded at the rate ruling at the day of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the profit or loss.
Official spot exchange rates for major currencies used in the translation of the reporting date items denominated in
foreign currencies were as follows (in €):
Compared to € 31 December 2012 31 December 2011
1 CHF 0.8282 0.8190
1 GBP 1.2240 1.1976
3.3. Classification of financial assets
Financial assets are classified in the following categories: financial assets at fair value through profit or loss, availablefor-sale
financial assets, investments held to maturity and loans and receivables. The classification of financial assets is
determined at their initial recognition.
All regular way purchases and sales of financial assets are recognized on the trade date, i.e. the date the Bank commits
to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the period generally established by regulation or convention in the marketplace.
Gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’
category are included in the profit or loss for the period in which they arise. Gains and losses arising from changes in
the fair value of available-for-sale financial assets are recognized through other comprehensive income, until the financial
asset is derecognized or impaired. At this time, the cumulative gain or loss previously recognized in other comprehensive
income is transferred to profit or loss of the period through adjustment. However, interest calculated using the effective
interest method and foreign currency gains and losses on monetary assets classified as available for sale is recognized
in the profit or loss for the period.
The fair values of quoted investments in active markets are based on current bid prices. If there is no active market for a
financial asset, the Bank establishes fair value using valuation techniques. These include the use of recent arm’s length
transactions, discounted cash flow analysis, and other valuation techniques commonly used by market participants.
The investments and other financial assets of the Bank are classified into the following categories:
3.3.1. Financial assets at fair value through profit and loss
(a) Financial assets at fair value through profit or loss
held, and financial assets designated at fair value through profit or loss at inception. The Bank does not apply hedge
accounting.
Financial assets are designated at fair value through profit or loss when they are part of a separate portfolio that is
managed and evaluated on a fair value basis in accordance with a documented risk management or investment
strategy. The fair values reported are usually observable market prices; as a guideline, the Bank prefers to invest
in securities for which market prices in active markets can be observed. Only in rare circumstances is the fair value
calculated based on current observable market data by using a valuation technique.
Financial assets at fair value through profit or loss are initially recognized at cost, and transaction costs, if any, are
expensed in the profit or loss. Subsequently, they are carried at fair value. Gains and losses arising from changes in
their fair value are immediately recognized in the profit or loss for the period. Together with interest earned on financial
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Addresses Glossary Financial Statements Segment Reports Overview Macroeconomic Environment RBI Vision and Mission Management Board Introduction