Annual report 2010 - Dexia.com

More documents

Recommendations

Info

Notes to the consolidated financial statementsManagement reportConsolidatedfinancial statementsAdditional information Annual financial statements1 January 2011. This amendment will have no impact onDexia, which is not a first-time adopter anymore.• Amendment to IFRIC 14 “Prepayments of a MinimumFunding Requirements“ applicable as from 1 January 2011.This amendment will not impact Dexia.• IAS 24 “Related Party Disclosures“ applicable as from1 January 2011. This standard supersedes IAS 24 “RelatedParty Disclosures“ (as revised in 2003). This amendment willnot significantly impact Dexia.• IFRIC 19 “Extinguishing Financial Liabilities with EquityInstruments“ applicable as from 1 January 2011. Thisinterpretation has no impact on Dexia.1.2.3. New IFRS standards, IFRIC interpretations andamendments issued during the current year but not yetendorsed by the European Commission• Amendment to IAS 12 “Deferred Tax: Recovery of UnderlyingAssets“. There is no impact for Dexia as Dexia measures theseassets at amortised cost.• Amendment to IFRS 1 “Severe Hyperinflation and Removalof Fixed Dates for First-time Adopters“. This amendment willhave no impact on Dexia, which is not a first-time adopteranymore.• “IFRS 9 Financial Instruments“ – Phase I Classification andMeasurement. Dexia performed several impact assessmentsand the main preliminary conclusions were the following:- Some structured loans, for which the embedded derivativeare currently bifurcated and measured at fair value while thehost contract is reported at amortised cost, will be measuredat fair value through profit or loss.- Bonds currently classified as available-for-sale and thusreported at fair value through other comprehensive income,will be reported either at amortised cost or at fair valuethrough profit or loss. Consequently the negative AFS reservewill either be reversed or reclassified to retained earnings.- For structured products (ABS, RMBS, …) a “look through“approach should be applied under the new standard in orderto determine the measurement model. As Dexia investedmostly in the highest tranche, these products could bemeasured at amortised cost under IFRS 9.- Some financial assets will probably be measured at fair valuethrough profit or loss as the business model criteria (collectingthe cash flows attached to the underlying instrument) foramortised cost are not respected.However, the outcome of these assessments is tentative andis subject to potentially important changes once the finalpolicies on impairment and hedge accounting are known.• Amendment to IFRS 7 “IFRS Disclosures – Transfers ofFinancial Assets“. This amendment will impact Dexia byrequiring more detailed disclosures on transferred assetswhich were not derecognised by Dexia.• “The Conceptual Framework for Financial Reporting 2010“completes the first phase of the review and comprises Chapter1 “The objective of general purpose financial reporting“ andChapter 3 “Qualitative characteristics of useful financialinformation“. There is no impact for Dexia because Dexiaalready complies with the principles of the ConceptualFramework.• “Improvements to IFRSs“ (issued by IASB in May 2010),which are a collection of amendments to existing InternationalFinancial Reporting Standards. These amendments areeffective as from 1 January 2011 and the impact mainlyrelates to disclosures.The IASB also published “IFRS Practice Statement:Management Commentary: A Framework for presentation“.This Practice Statement is not an IFRS but provides a nonbindingframework for the presentation of managementcommentary.1.2.4. Changes in presentationDue to the sale of FSA insurance activities, the publication lineXVI “Deferred Acquisition Costs“ became irrelevant and hasbeen removed. Consequently, in the consolidated financialstatements as at 31 December 2010 an amount of EUR-7 million of deferred acquisition costs has been reclassified to“General and administrative expense“.Dexia has decided to report as from 30 June 2010 as aseparate line item in statement of income all legal litigationsin the line “Provisions for legal litigations“ below Grossoperating income together with “Impairment on loans andprovisions for credit commitments“, “Impairment on tangibleand intangible assets“ and “Impairment on goodwill“. InDexia's previous reporting, such legal litigations were reportedin “Other net income“.The IASB amended IAS 39 in October 2008. By thisamendment, an entity is allowed to reclassify, if certainconditions are met, financial assets from “Held for Trading“or “Available-for-Sale“ to “Loans and Receivables“ and from“Held for Trading“ to “Available-for-Sale“. Dexia mainlyapplied this amendment to reclassify a part of its “Availablefor-Sale“portfolio to “Loans and Receivables“. These assetswere transferred at fair value on 1 October 2008, the date ofreclassification. The amortization of the discount on the bondis compensated by the amortization of the “frozen“ fair valueadjustment. The consequences were that (i) these assets aresubject to the impairment procedure applicable for the category“Loans and Receivables“ and (ii) any subsequent change infair value does no longer impact Dexia's financial statements.In order to distinct the “frozen“ fair value adjustments ofreclassified assets from the fair value adjustments relating tothe remaining “Available-for-Sale“ portfolio, Dexia decided tosplit these elements within its equity.1.3. CONSOLIDATION1.3.1. Business combinationsAcquisitions of businesses are accounted for using theacquisition method. The consideration transferred in abusiness combination is measured at fair value, which iscalculated as the sum of the acquisition-date fair values ofthe assets transferred by Dexia, the liabilities incurred by Dexiato former owners of the acquiree and the equity interests128 Dexia Annual report 2010
Notes to the consolidated financial statementsissued by Dexia in exchange for control of the acquiree.Acquisition-related costs are generally recognised in profit orloss as incurred. At the acquisition date, the identifiable assetsacquired and the liabilities assumed are recognised at theirfair value at the acquisition date.Non-controlling interests may be initially measured either at fairvalue or at the non-controlling interest's proportionate share ofthe recognised amounts of the acquiree's identifiable net assets.The choice of measurement basis is made on a transaction-bytransactionbasis. The equity and net income attributable to thenon-controlling interests are shown separately in the balancesheet and statement of income respectively.When the consideration transferred by Dexia in a businesscombination includes assets or liabilities resulting froma contingent consideration arrangement, the contingentconsideration is measured at its acquisition-date fair valueand included as part of the consideration transferred in abusiness combination. Subsequent changes in the fair valueof the contingent consideration are typically recognised inprofit or loss.When a business combination is achieved in stages, Dexia'spreviously held equity interest in the acquiree is remeasuredto fair value at the acquisition date (i.e. the date on whichDexia obtains control) and the resulting gain or loss, if any,is recognised in profit or loss. Amounts arising from interestsin the acquiree prior to the acquisition date that havepreviously been recognised in other comprehensive incomeare reclassified to profit or loss where such treatment wouldbe appropriate if that interest were disposed of.1.3.2. SubsidiariesSubsidiaries are those entities over whose financial andoperating policies Dexia, directly or indirectly, may exercisecontrol.Subsidiaries are fully consolidated as at the date on whicheffective control is transferred to Dexia and are no longerconsolidated as at the date on which Dexia's control ceases.Intercompany transactions, balances and unrealised gains andlosses on transactions among Dexia's companies have beeneliminated. Where necessary, the accounting policies of thesubsidiaries have been amended to ensure consistency withthe policies adopted by Dexia.Changes in the Dexia's ownership interests in subsidiaries thatdo not result in the Group losing control over the subsidiariesare accounted for as equity transactions. The carrying amountsof the Group's interests and the non-controlling interests areadjusted to reflect the changes in their relative interests in thesubsidiaries. Any difference between the amount by whichthe non-controlling interests are adjusted and the fair valueof the consideration paid or received is recognised directly inequity.When Dexia loses control of a subsidiary, the profit or loss ondisposal is calculated as the difference between:• the aggregate of the fair value of the consideration receivedand the fair value of any retained interest; and• the previous carrying amount of the assets (includinggoodwill) and liabilities of the subsidiary and any noncontrollinginterests.The fair value of any investment retained in the former subsidiaryat the date on which control is lost, is regarded as the fairvalue on initial recognition for subsequent accounting underIAS 39 “Financial Instruments: Recognition and Measurement“or, where applicable, the cost on initial recognition of aninvestment in an associate or a jointly controlled entity.1.3.3. Jointly controlled entitiesA joint venture (JV) is a contractual arrangement wherebytwo or more parties undertake an economic activity thatis subject to joint control. Joint ventures are accounted forvia the proportionate consolidation method. In the financialstatements, joint ventures are integrated by combining theirshare of the assets, liabilities, income and expenses on a lineby-linebasis.The same consolidation treatment as applied to subsidiaries,is applied to intercompany transactions. Where necessary, theaccounting policies of the jointly controlled entities have beenamended to ensure consistency with the policies adopted byDexia.1.3.4. AssociatesInvestments in associates are initially measured at cost andaccounted for using the equity method. Associates areinvestments in which Dexia has significant influence, but doesnot exercise control. This is usually the case, when Dexia ownsbetween 20% and 50% of the voting rights. The ownershipshare of net income for the year is recognised as income ofassociates, whereas the share in other comprehensive incomeof associates is carried on a separate line of the statement ofcomprehensive income and the investment is recorded in thebalance sheet at an amount that reflects its share of the netassets increased with related goodwill.Gains on transactions between Dexia and its “equity methodinvestments“ are eliminated to the extent of Dexia's interest.The recognition of losses from associates is discontinuedwhen the carrying amount of the investment reaches zero,unless Dexia has incurred or guaranteed legal or constructiveobligations in respect of the associates' undertakings. Wherenecessary, the accounting policies of the associates have beenamended to ensure consistency with the policies adopted byDexia.1.3.5. Special purpose entities (SPE's)An SPE shall be consolidated when the substance of therelationship between Dexia and the SPE indicates that the SPEis controlled by Dexia.Control may arise through the predetermination of theactivities of the SPE (operating on “autopilot“) or otherwise.The following circumstances may indicate a relationship inwhich Dexia controls an SPE (which it should consequentlyconsolidate):• The activities of the SPE are being conducted on behalf ofDexia according to its specific business needs;Management reportConsolidatedfinancial statementsAdditional information Annual financial statementsAnnual report 2010 Dexia129
Page 1:
A n n u a lr e p o r t2 0 1 0
Page 4 and 5:
4 Group profile8 Message from the c
Page 6 and 7:
Group profileManagement reportConso
Page 8 and 9:
Group profileRESULTS Dexia GAAP IFR
Page 10 and 11:
Message from the ChairmenManagement
Page 12 and 13:
2010 and early 2011 highlightsManag
Page 14 and 15:
2010 and early 2011 highlightsDecem
Page 16 and 17:
Update on the transformation planMa
Page 18 and 19:
Update on the transformation planMa
Page 20 and 21:
StrategyManagement reportConsolidat
Page 22 and 23:
Declaration of corporategovernanceM
Page 24 and 25:
Declaration of corporate governance
Page 26 and 27:
Page 28 and 29:
Page 30 and 31:
Page 32 and 33:
Page 34 and 35:
Page 36 and 37:
Page 38 and 39:
Page 40 and 41:
Page 42 and 43:
Page 44 and 45:
Page 46 and 47:
Page 48 and 49:
Page 50 and 51:
Page 52 and 53:
Page 54 and 55:
Page 56 and 57:
Page 58 and 59:
Page 60 and 61:
Page 62 and 63:
Page 64 and 65:
Page 66 and 67:
Page 68 and 69:
Page 70 and 71:
Shareholder informationManagement r
Page 72 and 73:
Shareholder informationManagement r
Page 74 and 75:
Human ResourcesMEMBERS OF STAFFGEND
Page 76 and 77:
Human ResourcesFinally, questions r
Page 78 and 79:
Sustainable developmentEnergy perfo
Page 80 and 81: Risk managementManagement reportCon
Page 82 and 83: Risk managementThe Operational Risk
Page 98 and 99: Capital managementManagement report
Page 100 and 101: Capital managementEconomic capitalE
Page 102 and 103: Financial resultsConsolidated state
Page 104 and 105: Financial resultsManagement reportC
Page 106 and 107: Activity and results of the busines
Page 116: Activity and results of the busines
Page 119 and 120: C o n s o l i d a t e d f i n a n c
Page 121 and 122: Liabilities Note 31/12/09 31/12/10(
Page 123 and 124: Consolidated statementof changes in
Page 125 and 126: Gains and losses not recognised in
Page 127 and 128: Consolidated cash flow statement(in
Page 129: Notes to the consolidated financial
Page 136 and 137: Notes to the consolidated financial
Page 181 and 182:
Notes to the consolidated financial
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Dexia saStatutory Auditor's reporto
Page 240 and 241:
240 Balance sheet241 Off-balance-sh
Page 242 and 243:
Balance sheet(before income appropr
Page 244 and 245:
Statement of incomeManagement repor
Page 246 and 247:
Notes to the annual financial state
Page 248 and 249:
Page 250 and 251:
Page 252 and 253:
Page 254 and 255:
Page 256 and 257:
Page 258 and 259:
Page 260 and 261:
Page 262 and 263:
Statutory Auditor's reportManagemen
Page 264 and 265:
Additional informationManagement re
Page 267 and 268:
Photographs: page 8: C. LEBEDINSKY/
show all

Annual report 2010 - Dexia.com

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?