Annual Financial Statements 2010 of Bank Austria

Consolidated Financial Statements in accordance with IFRSs
A – Accounting policies (CoNTINuED)
Intangible assets
When recognised initially, intangible assets which are not acquired as part of a business combination are measured at cost.
A distinction is made between intangible assets with a finite useful life and those with an indefinite useful life.
Intangible assets with a finite useful life are amortised over the useful life and are tested for impairment if there is any indication that the intangible
asset may be impaired. In the case of intangible assets with an indefinite useful life, an impairment test is performed at least once a year for each
asset or at the level of the cash-generating unit. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite
useful life is reviewed once a year to determine whether events and circumstances continue to support the useful life assessment. If they do not,
the change in the useful life assessment from indefinite to finite is made prospectively.
The amortisation period and the amortisation method for intangible assets with a finite useful life are reviewed at least at the end of each reporting
period. The amortisation charge for intangible assets with a finite useful life is recognised in the income statement in the expense category corresponding
to the function of the intangible asset in the company. Bank Austria regards intangible assets as having the following useful lives:
• software: 4–6 years
• other intangible assets: 4–20 years
• customer base: 3–20 years
Non-current assets classified as held for sale
In respect of assets which are classified in the balance sheet as held for sale, management must be committed to a plan to sell such assets and
such sale should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are to be measured at the lower of their carrying amount and fair value less
costs to sell. Assets and liabilities of the disposal group are stated separately in the consolidated financial statements.
Deferred taxes
Taxes on income are recognised and calculated in accordance with IAS 12 under the balance sheet liability method. At any taxable entity, the
calculation is based on the tax rates that are expected to apply to the period in which the deferred tax asset or liability will reverse.
Deferred tax assets and liabilities are calculated on the basis of the difference between the carrying amount of an asset or a liability recognised
in the statement of financial position and its respective tax base. This difference is expected to increase or decrease the income tax charge in the
future (temporary differences). Deferred tax assets are recognised for tax losses carried forward if it is probable that future taxable profits will be
available at the same taxable entity. Deferred tax assets and liabilities are not discounted.
The tax expense related to profit before tax is recognised in the relevant item in the consolidated income statement. Taxes other than those on
income are included in the item Other administrative expenses.
Pursuant to the group taxation rules introduced in Austria in 2005, Bank Austria has formed a group of companies. Profit and loss transfer agreements
have been concluded with 28 group members, tax compensation agreements have been reached with 16 companies and there are 4 joint
control arrangements.
other assets
The components of this item are accounts receivable from deliveries of goods and the performance of services, tax claims and deferred tax assets.
Bank Austria · Annual Financial Statements 2010
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