COMMERZBANK AKTIENGESELLSCHAFT

To our Shareholders Corporate Responsibility Management Report Risk Report Group Financial Statements Further Information 225 281
258 202 Statement of comprehensive income
260 204 Balance sheet
262 206 Statement of changes in equity
264 208 Cash flow statement
266 210 Notes
409 353 Auditors’ report
(16) Fixed assets
The land and buildings, and also office furniture and equipment,
shown under this item are recognised at cost, less regular
depreciation. Impairments are made in an amount by which the
carrying value exceeds the higher of fair value less costs to sell
and the value in use of the asset.
Where the reason for recognising an impairment in previous
financial years ceases to apply, the impairment is reversed to no
more than amortised cost.
In determining the useful life, the likely physical wear and
tear, technical obsolescence and legal and contractual
restrictions are taken into consideration. All fixed assets are
depreciated or written off over the following periods, using the
straight-line method:
Buildings
Expected useful life in years
25– 50
Office furniture and equipment 2– 25
In line with the materiality principle, purchases of low-value
fixed assets were recognised immediately as operating
expenses. Profits realised on the disposal of fixed assets appear
under other income, with losses being shown under other
expenses.
(17) Leasing
In accordance with IAS 17, a lease is classified as an operating
lease if it does not substantially transfer to the lessee all the risks
and rewards incidental to ownership. By contrast, leases where
substantially all of the risks and rewards are transferred to the
lessee are classified as finance leases. The present value of the
lease payments is central to determining the risks and rewards
of the lease. If the present value amounts to at least substantially
all of the fair value of the leased asset, the lease is classified as a
finance lease. The most commonly leased assets are properties
and vehicles.
The Group as lessor
• Operating leases
If the risks and rewards of ownership remain substantially
with the lessor, the asset will continue to be reported on the
balance sheet. Leased assets are reported in the consolidated
balance sheet under other assets and are shown at cost, less
depreciation over their useful economic lives and/or
impairments. Unless a different distribution is appropriate in
individual cases, we recognise the proceeds from leasing
transactions on a straight-line basis over the lifetime of the
lease and report them under other net income.
• Finance leases
If virtually all the risks and rewards relating to the leased
asset are transferred to the lessee, the Commerzbank Group
recognises a claim on the lessee. The claim is shown at its
net investment value at the inception of the lease. Lease
payments received are divided into an interest portion and a
repayment portion. The income is recognised as interest
income through profit or loss for the respective period.
Real estate lease agreements have a fixed basic rental period
and generally include an option for the lessee to buy. The
payments to be made by the lessee are calculated based on the
total investment costs less the residual value of the leased asset
as determined at the start of the lease agreement. During the
fixed basic rental period the lessee bears all the asset-related
costs and the third-party costs of the leasing company. The risk
of unexpected or partial loss of the leased asset is borne by the
lessor.
Lease agreements for moveable assets (vehicles, IT
equipment) are structured as partially amortising agreements
with an option to purchase and can be terminated. Because the
fixed rental period is shorter in relation to the normal length of
use in the case of partially amortising agreements, only part of
the total investment costs are amortised.
Leases which may be terminated have no fixed rental period.
In the event of termination a previously agreed final payment
becomes due, which covers the portion of the total investment
costs not yet amortised. If notice of termination is not given, the
lease rolls over. The risk of unexpected or partial loss of the
leased asset is then borne again by the lessor.
The Group as lessee
Expenditure on operating leases is always recorded on a
straight-line basis over the life of the lease agreement and
reported under operating expenses.
Finance leases where the Commerzbank Group is a lessee are
of minor significance.
Group Financial Statements