2005 Annual Report / CrÃ©dit Agricole (Suisse) SA

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30 – 2005 Annual Report / Crédit Agricole (Suisse) SACash, receivables relating to money marketinstruments and commitmentsThese items are carried in the balance sheet at theirnominal value. Specific provisions are raised for anyreceivables deemed doubtful and are charged directlyagainst the assets concerned. Discounts on moneymarket instruments are allocated to the income statementon an accruals basis through adjustment accounts.Accounting receivables are carried in the balance sheetat their book value, which is based on an accrual methodvaluation.Amounts due from banks and customers,mortgagesDoubtful receivables, i.e. receivables for which it isunlikely that the debtor will be able to meet his commitments,are valued individually and the write-down iscovered by valuation adjustments.When a receivable is deemed to be wholly or partiallyirrecoverable, it is written down by debiting the correspondingvaluation adjustment.A receivable is no longer deemed to be doubtful whenthe arrears (principal plus interest) have been settled,servicing of the debt has returned to normal and othersolvency criteria are met.Securities and precious metals trading portfoliosSecurities acquired in the course of trading activities aremarked to market.Long-term financial investmentsFixed-income debt instruments to be held until maturityare valued according to the accrual method. The correspondingpremiums and discounts are apportioned overthe residual period to maturity. These adjustments arerecorded as additions to or deductions from book value.Participating interests and other debt instruments arevalued at the lower of cost and market value. Adjustmentsto the value resulting from solvency conditionsare not treated separately. The net impact of changesin value is recognised as ordinary income or expenses.Gains and losses arising on interest alienated beforematurity or repaid early are spread over the remaining lifeof the transaction, i.e. until the initial expected maturity.Borrowing / lending of securities and repurchaseagreementsBorrowing and lending of securities and repurchaseagreements are recorded in the same way as sales andpurchases. These transactions may be recorded underthe following headings :• Money market instruments (assets and liabilities)• Securities and precious metals trading portfolios• Long-term financial investments.These transactions are valued in the same way assecurities held directly by the Group.
2005 Annual Report / Crédit Agricole (Suisse) SA – 31Non-consolidated holdingsThese holdings are recorded in the balance sheet at theiracquisition cost. Provisions for diminution in value arerecorded under “valuation adjustments and provisions”.Tangible fixed assetsFixed assets are recognised at their acquisition cost anddepreciated on a straight-line basis over their estimateduseful life as follows :• vehicles and IT equipment3 years• fixtures and fittings5 years• mainframe IT system5 years• fitting-out of premises occupiedunder a long-term lease10 years• buildings used by the Bank(1.5% per annum) 66.5 yearsUpon subsequent revaluation, tangible fixed assets arecarried in the balance sheet at their acquisition cost, lesscumulative depreciation. The depreciation calculation isbased on the asset’s entire estimated useful life. Theaccounting value is reviewed regularly to ensure it is notimpaired.Intangible assetsWhen the total cost of an acquisition is higher than thenet assets acquired, valued in accordance with Groupprinciples, the difference is treated as goodwill acquiredand is capitalised. Intangible assets are recorded under“intangible assets” and amortised on a straight-line basisover 5 years.Valuation adjustments and provisionsThe Bank’s credit activity is limited mainly to Lombardloans and transactional commodity finance. The particularityof these transactions is that repayment capacity islinked to the collateral put up during the transactions(self liquidating transactions) as well as to the solvencyof the debtor.When there is doubt as to a debtor’s ability to honour hiscommitments, the Group raises adequate provisions forthe principal and interest, taking into account existingguarantees and collateral, as well as the economic environment.These valuation adjustments, which are made onan individual basis for each position, are charged directlyagainst the balance sheet assets concerned. Interestdeemed doubtful under this rule is provisioned from thedate on which serious doubts first arise.In accordance with the prudence principle, other identifiablerisks are covered by provisions recognised in the balancesheet under “valuation adjustments and provisions”.The tax impact of timing differences between the balancesheet value and the tax value of assets and liabilities isrecognised as a deferred tax liability in the balance sheet.Deferred tax assets on the timing differences or on taxlosses carried forward are recognised only if they are likelyto be realised in the future through the existence of sufficienttaxable profits. Deferred tax expenses and incomeare recognised in the income statement.Accrued income and expensesCut-off is applied to interest income and expense, lendingcommissions considered as a component of interest,personnel and other operating expenses, safe-keepingfees, commissions on fiduciary transactions and assetmanagement commissions. Ordinary taxes still outstandingat the year end are included under this heading.Consolidated Financial Statements
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2005 Annual Report / CrÃ©dit Agricole (Suisse) SA

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