Annual Report 2010 LGT Bank in Liechtenstein Ltd., Vaduz

16
Securities lending and borrowing transactions
Securities lending is recorded at the value of cash
deposits which have been received or made, including
interest accrued.
Securities which have been borrowed or accepted as
collateral are only recorded in the balance sheet if the
bank gains control of the contractual rights contained in
these securities. Securities lent or provided as collateral
are only taken off the balance sheet if the bank loses
the contractual rights associated with these securities.
The market values of the securities which have been
either borrowed or lent are monitored daily so that
additional collateral can be provided or requested
where necessary.
Fees arising from securities lending and repurchase
transactions, which have been received or paid, are
entered as interest earned and interest paid.
Amounts due to banks and clients
Amounts due to banks and clients are reported in the
balance sheet at nominal values.
Securitized liabilities
Securitized liabilities are reported in the balance sheet
at the value of the repayment amount.
Other liabilities
Derivatives are reported at their fair value. The other
items (settlement accounts, coupons etc.) are reported
at their nominal value or the value of the repayment
amount.
Appendix to the financial statement
Subordinated debt
Securitized subordinated debt is entered in the balance
sheet at the value of the repayment amount. Non-securitized
subordinated debt is reported at the nominal
value.
Value adjustments and provisions
In accordance with prudent accounting practice, specific
value adjustments and provisions are made for all
identifiable risks. To cover latent default risks, which,
as experience has shown, exist in a loan portfolio, portfolio
value provisions are also made based on a systematic
approach. Value adjustments are offset directly
against the corresponding asset position. Provisions
are formed for uncertain liabilities and for threatened
losses which are likely or certain on the balance sheet
reporting date, but whose level or date of occurrence
is uncertain. Provisions are reported under the same
name in the balance sheet.
Taxes
Taxes accruing to the result for the period under review
are recorded as expenses in the accounting period in
which the corresponding profit has occurred. For value
adjustments and provisions recognized and entered
against tax only, a provision for deferred taxes is made
against the profit and loss account. Taxes are calculated
on the basis of the estimated rates for actual taxation.
Provisions for general banking risks
Provisions for general banking risks are formed to hedge
against latent risks in the bank’s operating activities.