Annual Report - VÚB banka

2.5 Foreign operations
The fi nancial statements include foreign operations
in the Czech Republic. The assets and liabilities of
foreign operations are translated to Sk at the foreign
exchange rate prevailing at the balance sheet
date. The revenues and expenses of foreign operations
are translated to Sk at rates approximating
the foreign exchange rates prevailing at the dates
of the transactions. Foreign exchange differences
arising on these translations are recognized directly
in equity.
The fi nancial statements of the Bank and its foreign
branch are combined on a line-by-line basis by adding
together like items of assets, liabilities, equity,
income and expenses. Intra-group balances, transactions
and resulting profi ts are eliminated in full.
2.6 Cash and balances with central banks
Cash and balances with central banks comprise
cash in hand and current accounts with the NBS
and the Czech National Bank (’CNB’), including
compulsory minimum reserves.
2.7 Treasury bills and other eligible bills
Treasury bills and other eligible bills represent
highly liquid securities that could be used for rediscounting
in the NBS without any time or other
constraints. The balance comprises treasury bills
issued by the Ministry of Finance and bills issued
by the NBS.
2.8 Loans and advances to banks
Loans and advances to banks include receivables
from current accounts in other than central banks,
deposits and loans provided to commercial banks
and to the NBS and the CNB.
The balances are presented at amortized cost including
interest accruals less any impairment losses.
An impairment loss is established if there is
objective evidence that the Bank will not be able to
collect all amounts due.
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2.9 Debt securities
Debt securities held by the Bank are categorized
into portfolios in accordance with the intent on
the acquisition date and pursuant to the investment
strategy. The Bank has developed security
investment strategies and, refl ecting the intent on
acquisition, allocated securities into the following
portfolios:
(a) Held for trading
(b) Available-for-sale
(c) Held-to-maturity
The principal differences among the portfolios relate
to the measurement and recognition of fair values
in the fi nancial statements. All securities held by
the Bank are recognized using settlement date
accounting and are initially measured at fair value
plus, in the case of fi nancial assets not held for trading,
any directly attributable incremental costs of
acquisition. Securities purchased, but not settled,
are recorded in the off balance sheet and changes
in their fair values, for purchases into the trading
and the available-for-sale portfolios, are recognized
in the income statement and in equity respectively.
VUB, a bank of Intesa Sanpaolo group