Annual Report - VÚB banka

2. Summary of significant accounting policies (continued)
The principal accounting policies applied in the preparation
of these fi nancial statements are set out
below. The accounting policies adopted are consistent
with those of the previous fi nancial year.
Reclassifications
Certain balances in the consolidated income statement
from 2006 were reclassifi ed in accordance
with their presentation in 2007 to better refl ect the
substance of the income and expense. All reclassifi
cations are related to the redesigned contracts
for the insurance of banking products that is being
collected from clients and subsequently paid to the
insurance company. Originally, the Bank reported
balances collected from clients and balances paid
to the insurance company in gross values. After
the reclassifi cation, only net margin is presented in
the income statement.
2006
2006 Restated Change
Fee and commission income 3,103 3,158 55
Fee and commission expense (1,185) (1,220) (35)
Other operating income 286 156 (130)
Other operating expenses (2,371) (2,261) 110
72
2.3 Segment reporting
The Bank reports fi nancial and descriptive information
about its operating segments in these fi nancial
statements. An operating segment is a component
of the Bank that engages in business activities
from which it may earn revenues and incur expenses
(including revenues and expenses relating to
transactions with other components of the Bank),
whose operating results are regularly reviewed by
the Bank’s management to make decisions about
resources to be allocated to the segment and to assess
its performance, and for which discrete fi nancial
information is available.
The Bank operates in three operating segments –
Retail banking, Corporate banking and Central treasury.
Every segment is exposed to different risks
and differs in the nature of its services, business
processes and types of customers for its products
and services.
For all segments the Bank reports a measure of
segment assets and liabilities and income and expense
items, a reconciliation of total reportable
segment revenues, total profi t or loss, total assets,
liabilities and other amounts disclosed for reportable
segments to corresponding amounts in the
Bank’s fi nancial statements.
Most of the transactions of the Bank are related to
the Slovak market. Because of the market size, the
Bank operates as a single geographical segment
unit.
2.4 Foreign currency transactions
Monetary assets and liabilities in foreign currencies
are translated to Sk at the offi cial National Bank
of Slovakia (’NBS’) exchange rates prevailing at the
balance sheet date. Income and expenses denominated
in foreign currencies are reported at the
NBS exchange rates prevailing at the date of the
transaction.
The difference between the contractual exchange
rate of a transaction and the NBS exchange rate
prevailing on the date of the transaction is included
in ‘Net trading income’, as well as gains and losses
arising from movements in exchange rates after the
date of the transaction.
Annual Report 2007