PA - Banco Security

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f) Non-controlling interest
The adjustments in the reconciliation between previous generally accepted accounting principles (i.e. Chile GAAP and IFRS) include
the effect of adjustments under IFRS in the subsidiaries with non-controlling interest.
Chile GAAP recognized the participation of minority shareholders in the equity of the subsidiaries as a separate account between
liabilities and equity of the consolidated financial statements of Grupo Security. Likewise, the consolidated income statement for
the year under Chile GAAP excluded through a specific line the participation of the non-controlling interests in the results of the
subsidiaries. Under IFRS the minority shareholders were part of the owners of the economic group and, therefore, their participation
is considered as part of the statement of changes in net equity and of the statement of comprehensive income.
g) Property, plant and equipment
Until 2009, property, plant and equipment was stated at cost plus price-level restatement and net of accumulated depreciation. As
of this year-end, the items of property, plant and equipment are measured at their historical cost corresponding to the acquisition
value plus the applied revaluations until December 31, 2008.
In the case of certain real estate property, and in conformity with the Compendium of Accounting Standards, the Bank adopted as
deemed cost the fair value of these assets based on independent appraisals.
h) Intangible assets
Until 2009, the intangible asset computer programs was stated at cost plus price-level restatement and net of accumulated
depreciation. As of January 1, 2010, the intangible asset was measured at its historical cost less the accumulated amortizations with
the revaluation applied until December 31, 2008.
i) Other Assets
As of the application of IFRS, certain expenses that were deferred are no longer recognized as assets under IFRS and have been
derecognized with a charge to equity.
j) Reclassifications
The 2009 financial statements include certain reclassifications to allow their comparison with the 2010 financial statements.
k) Accounting changes affecting the Bank Subsidiary
i) Interest accrual at effective interest rate
Only for those loans receivable from clients granted as of January 1, 2008, (i.e. the Bank’s transition date), the Bank accrues
the interests of its loans at the effective interest rate of the loan. Therefore the direct and incremental costs incurred in the
origination of the loans have been considered.
ii) Impaired loan portfolio
As of the adoption of IFRS the Bank has incorporated the concept of impaired loan portfolio which includes the loans issued by
the Bank where there exists concrete evidence that the debtors will default by failing to make any of the contractual payments,
regardless of the possibility of collecting the amounts due by going after the debtors’ collateral, through the exercise of legal
collection actions or by agreeing on different repayment conditions.
As per the above, the Bank will maintain the loans in the impaired portfolio until the Bank observes a normalization of the loan’s
payment capacity or behavior. Otherwise, it will proceed to write-off the individual loan.