2005 Annual Report / Crédit Agricole (Suisse) SA

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