Annual Report: - Gorenjska banka

2.19. Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when
due, in accordance with the terms of a debt instrument. Such financial guarantees are given to
banks, financial institutions and other bodies on behalf of customers to secure loans, overdrafts and
other banking facilities.
Financial guarantees are initially recognised in the financial statements at fair value on the date the
guarantee was given. Subsequent to initial recognition, the bank's liabilities under such guarantees
are measured at the higher of the initial measurement, less amortisation calculated to recognise in
the income statement the fee income earned on a straight line basis over the life of the guarantee
and the best estimates of the expenditure required to settle any financial obligation arising at the
reporting date. These estimates are determined based on experience of similar transactions and
history of past losses, supplemented by the judgement of Management.
2.20. Income tax and deferred income taxes
Taxation has been provided for in the financial statements in accordance with Slovenian legislation
currently in force. The charge for taxation in the statement of income for the year comprises current
tax and changes in deferred tax.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax basis of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax is determined using tax rates that have been enacted for the financial year
following the reporting year.
Deferred tax assets are recognised where it is probable that future taxable profit will be available
against which the temporary can be utilised.
Deferred tax related to fair value re-measurement of available for sale investments is charged or
credited directly to other comprehensive income and is subsequently recognised in the income
statement together with the deferred gain or loss.
Income tax is calculated using 20% (2010: 20%) tax rate.
2.21. Share capital
2.21.1. Share issue costs
Incremental costs directly attributable to the issue of new shares or options or to the acquisition of
a business are shown in equity as a deduction, net of tax, from the proceeds.
2.21.2. Dividends on ordinary shares
Dividends on ordinary shares are recognised in equity in the period in which they are approved by
the Bank’s shareholders.
2.21.3. Treasury shares
Where the Bank purchases the Bank’s shares, the consideration paid is deducted from total
shareholders’ equity as treasury shares until they are cancelled. Where such shares are subsequently
sold, any consideration received is included in shareholders’ equity.
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Gorenjska banka, d. d., Kranj
Annual Report 2011
Financial Report