Annual Report: - Gorenjska banka

Under this method, The Bank’s share of its associates' post-acquisition profits or losses is recognized
in the income statement and its share in post-acquisition movements in reserves is recognised in
reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of
the investment.
The Bank's accounting policy contains rules regarding the non-materiality and in line with these
rules the Bank's subsidiaries accounts do not exceed set limits for materiality individually as well as
a group. The Bank has not prepared consolidated financial statements, as the effect of consolidation
of subsidiaries is of no material importance. Investments in associates are accounted for by the
equity method.
Investments in subsidiaries and associates are disclosed within investment in associates and
subsidiaries (Note 27).
2.3. Foreign currency translationt
2.3.1. Functional and presentation currency
Assets and liabilities items denominated in foreign currency are converted in the financial accounts
with the Bank of Slovenia and ECB reference rate as published on 31 December 2011 (for the year
2010: with the Bank of Slovenia and ECB reference rate as published on 31 December 2010). The
effects of foreign currency translation are shown in the income statement as a net result of foreign
currency translation.
The financial statements are presented in euro, which is the Bank's functional and presentation
currency.
2.3.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
Translation differences on non-monetary items, such as equities held at fair value through profit or
loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items,
such as equities classified as available for sale financial assets, are presented in other comprehensive
income within the corresponding item.
Income and costs denominated in foreign currency are translated into euro using the exchange rate
as of date of transaction. Gains and losses arising from purchase and sale of foreign currency are
included in the income statement of the current year in net gains less losses on financial assets and
liabilities held for trading.
2.4. Financial assets
2.4.1. Classification
The Bank classifies its financial assets in the following categories: financial assets at fair value through
profit or loss, loans and receivables, held to maturity investments and available for sale financial
assets. In general management determines the classification of its investment at initial recognition.
60
Gorenjska banka, d. d., Kranj
Annual Report 2011
Financial Report