COMMERZBANK AKTIENGESELLSCHAFT

Group Financial Statements
268
212 Commerzbank Annual Report 2011
The assumptions and parameters underlying the estimates we
have made are based on the exercise of appropriate judgement
by management. This applies in particular to the appropriate
selection and use of parameters, assumptions and modelling
techniques when valuing financial instruments for which there
are no market prices and no comparative parameters observable
on the market. Where differing valuation models lead to a range
of different potential valuations, management uses its judgement
to determine the choice of the model to be used.
The following items in the financial statements are also
subject to the judgement of management:
• The reclassification of certain financial assets from the
category of available-for-sale financial instruments to the
category loans and receivables (see Note 5).
• The impairment of loans and the recognition of provisions for
off-balance-sheet lending exposures (in particular the choice
of criteria and the assessment of whether collateral is
impaired, see Note 9).
• Impairment testing of other financial assets such as noncurrent
assets held for sale and holdings in companies
accounted for using the equity method (in particular the
choice of criteria used to determine whether an asset is
impaired; see Note 19).
• Impairment testing of non-financial assets such as goodwill
and other intangible assets (in particular the criteria used to
determine the recoverable amount, see Note 15).
• Impairment testing of deferred tax assets in accordance with
IAS 12.24 ff. (in particular determining the methodology used
for tax planning and to assess the probability that the
expected future tax effects will actually occur; see Note 25),
• The recognition of provisions for uncertain liabilities (see
Note 23).
(2) Changes to accounting policies
In essence we have employed the same accounting policies
as for the Group financial statements for the year ended
December 31, 2010.
In accordance with IAS 32.33, holdings of treasury shares
(i.e. Commerzbank shares) must be deducted directly from
equity. Until now the accounting par value of any purchases or
disposals of treasury shares was therefore recognised in
subscribed capital, with the differential between the accounting
par value and the market value of the shares being recognised in
the capital reserve.
In order to distinguish more clearly the effects on equity of
purchases and sales of treasury shares that stem primarily from
trading activities, we have changed the way we report treasury
shares in the financial year 2011.
When treasury shares are purchased the accounting par
value is deducted from subscribed capital and the difference
between the accounting par value and the cost of the shares is
recognised in retained earnings. A resale of treasury shares
effectively represents a capital increase and the accounting
treatment is therefore a mirror image of that applying to the
purchase of treasury shares. If a resale of treasury shares
generates income in excess of the original cost of the shares, the
difference is recognised in the capital reserve.
To further increase transparency we report brokerage
commission, which was previously contained in other
commission income and expenses, as a separate item since
December 31, 2011. The reclassifications for the prior year
amounted to €330m for commission income and €72m for
commission expenses (see Note 33). In the interests of greater
clarity we have also changed the way in which information is
reported in the net trading income note. Since December 31,
2011 we now break down net trading income into net trading
gain or loss, net interest income and the net gain or loss from
applying the fair value option (see Note 34).
We have restated the prior-year figures in the balance sheet,
the statement of changes in equity and the relevant notes
accordingly. However, these reclassifications had no impact on
consolidated profit or loss or earnings per share for the financial
years 2010 and 2011.
(3) Consolidated companies
The Group financial statements include all material subsidiaries
in which Commerzbank Aktiengesellschaft directly or indirectly
holds more than 50% of the voting rights or exercises a
controlling influence by other means. These also include
significant special purpose entities and funds that are controlled
as defined by SIC 12. Significant associates and jointly
controlled entities are accounted for using the equity method.
Subsidiaries, associates and jointly controlled entities of
minor significance for the Group’s financial position have not
been fully consolidated or not accounted for using the equity
method; instead, they are reported under financial investments
as holdings in non-consolidated subsidiaries or equity holdings.
These companies account for less than 0.1% (previous year: 0.3%)
of the Group’s total assets. A full list of all ownership interests of
the Commerzbank Group is contained in Note 106.