Untitled - Saxo World

NOTES to the financial statements1 Accounting Policies · continuedgible assets. Amortisation is recognised over the expectedlifetime of the contracts.Trademarks are measured based on the relief from royaltymethod under which the value is calculated based on expectedfuture cash flows for the trademarks on the basisof key assumptions about expected useful life, royalty rateand growth rate, and a theoretically calculated tax effect.Domicile premises are measured at cost plus property improvementexpenditure and less depreciation and impairmentcharges.The intangible and tangible assets are generally amortisedand depreciated on a straight-line basis over the estimateduseful life. Amortisation and depreciation periods areas follows:Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5 yearsClient relations . . . . . . . . . . . . . . . . . . . . . . . . 4-6 yearsTrademarks . . . . . . . . . . . . . . . . . . . . . . . . . . 15 yearsDomicile premises . . . . . . . . . . . . . . . . . . . . . 50 yearsLeasehold improvements . . . . . . . . . . . . . . . . 5 yearsFixtures, equipment and vehicles . . . . . . . . . . 3-5 yearsIT equipment . . . . . . . . . . . . . . . . . . . . . . . . . 3-5 yearsAeroplane . . . . . . . . . . . . Based on number of hours in airIntangible and tangible assets are tested for impairment ifindications of impairment exist. An impaired asset is writtendown to its recoverable amount, which is the higherof its fair value less costs to sell and its value in use.Depreciation, amortisation and impairment write-downare recognised in the income statement.Securities and derivative financial instrumentsPurchase and sale of financial assets are accounted for onthe trade date.Listed securities are recognised at officially quoted prices.Securities are measured at the fair value in the balancesheet. Value adjustments of securities are recognised inthe income statement.Derivative financial instruments (open spot transactions,forward exchange transactions, futures and options, etc.)are measured at fair value, which is determined on thebasis of the closing prices on the balance sheet date.Changes in its fair value are recognised in the incomestatement as a component of Price and exchange rateadjustments.For matching positions mid prices are applied as the basisfor determining the fair value of the matching positionand bid/ask prices on the open net position, respectively.When a derivative (or a non-derivative financial liability) isdesignated as the hedging instrument in a hedge of a netinvestment in a foreign operation, the effective portion ofchanges in the fair value of the hedging Instrument is recogniseddirectly on equity, in the foreign currency translationreserve. Any ineffective portion of changes in thefair value of the derivative is recognised immediately inthe income statement. The amount recognised on equityis removed and included in the income statement on disposalof the foreign operation.Derivative financial instruments with a positive fair valueare recognised as Other assets while instruments with anegative fair value are recognised as Other liabilities.Net premiums on forward transactions related to foreignexchange and securities are presented in the incomestatement as interest receivable.Proposed dividendsThe Board of Directors’ proposal for dividends for the yearsubmitted to the general meeting is included as a separatereserve in shareholders’ equity. The dividends are recognisedas a liability when the general meeting hasadopted the proposal.50 · SAXO BANK · ANNUAL REPORT 2009