Untitled - Saxo World

NOTES to the financial statements1 Accounting PoliciesGeneralThe Annual Report for 2009 has been prepared in accordancewith the Danish Financial Business Act, the Danishexecutive order on financial reports for credit institutionsand investment companies, etc., and guidance issued byThe Danish Financial Supervisory Authority.The accounting policies are unchanged compared to lastyear.Determination of the useful life of software is based onperiodic assessments of actual technical life and planneduse. Internally developed software is deemed to have alonger technical life than acquired standard applications.Based on this assessment, the depreciation period of internallydeveloped software has been changed from 3 to5 years. The depreciation charge in current and futureyears is changed accordingly. The positive effect of thechanged depreciation period of DKK 20 million is includedin the income statement in Depreciation, amortisation andwrite-down of intangible and tangible assets. Depreciationof acquired software is unchanged in 3 years.ConsolidationThe consolidated financial statements include the ParentCompany Saxo Bank A/S and its subsidiaries, in which theparent company exercises a controlling interest. The financialstatements of the subsidiaries are included in the consolidatedfinancial statements from the date that controlcommences until the date that control ceases.The consolidated financial statements are prepared byadding accounting items of similar content. Intercompanytransactions, balances and gains and losses from intercompanytransactions are eliminated.Foreign currency exchangeThe presentation currency of the consolidated financialstatements is Danish kroner. The functional currency ofeach of the Group’s units is the currency used in the primaryfinancial environment in which the individual entityoperates. Transactions denominated in currencies otherthan the functional currency are considered transactionsdenominated in foreign currencies.Transactions in foreign currency are translated at the exchangerate of the unit’s functional currency at the transactiondate. Monetary items in foreign currency are translatedat the exchange rates at the balance sheet date.Realised and unrealised gains and losses are recognised inthe income statement as exchange rate adjustments.When translating net investments with a functional currencyother than DKK, income and expenses are translatedat the exchange rates on the transaction date, andassets and liabilities are translated at the exchange ratesat the balance sheet date. Exchange rate gains and lossesare recognised directly on equity. Foreign exchange adjustmentsof balances, which are considered part of the netinvestments, are recognised in the consolidated financialstatements directly on equity.Danish State GuaranteeThe Bank has joined the Danish State Guarantee (BankPackage I) arrangement expiring on 30 September 2010.Guarantee commission is recognised in the income statementon a straight-line basis over the guarantee periodand included in Other charges. The liability to cover possiblelosses under the arrangement is recognised as a provisionwhen a loss is probable and can be measured reliably.Such amounts are recognised in the income statement asLoss and provisions for bad debts. The remaining liabilitynot provided for is included in Contingent and contractualliabilities.INCOME STATEMENTInterest and commissionInterest revenues and interest expenses, commission andpremiums on forward transactions are accrued over the48 · SAXO BANK · ANNUAL REPORT 2009