Annual report 2009 - Dexia.com

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Notes to the consolidated financialstatementsManagement reportConsolidatedfinancial statementsAnnual financial statementsAdditional information1. Accounting principlesand rules of consolidatedfinancial statementsGeneral informationNotes to the financial statements1. ACCOUNTING POLICIES 1071.1. Basis of accounting 1071.2. Changes in accounting policies sincethe previous annual ublication that may impactDexia Group 1071.3. Consolidation 1081.4. Offsetting financial assets and financial liabilities 1091.5. Foreign currency translation and transactions 1091.6. Trade date and settlement date accounting 1091.7. Realised gains and losses on salesof financial assets 1091.8. Impairments on financial assets 1091.9. Interest income and expense 1101.10. Fee and commission income and expense 1101.11. Insurance and reinsurance activities 1111.12. Network costs 1131.13. Deferred acquisition costs 1131.14. Loans and advances due from banksand customers 1131.15. Financial assets or liabilities heldfor trading and financial assets or liabilitiesmeasured at fair value through profit or loss 1131.16. Loans and securities available for saleand securities held to maturity 1141.17. Derivatives 1141.18. Hedging derivatives 1141.19. Hedge of the interest-rate risk exposureof a portfolio 1151.20. Day one profit or loss 1151.21. Tangible fixed assets 1161.22. Intangible assets 1161.23. Goodwill 1161.24. Other assets 1161.25. Leases 1161.26. Sale and repurchase agreementsand lending of securities 1171.27. Borrowings 1171.28. Deferred income tax 1171.29. Employee benefits 1171.30. Provisions 1181.31. Share capital and treasury shares 1181.32. Fiduciary activities 1181.33. Cash and cash equivalents 1191.34. Earnings per share 1191.35. Fair value 1192. SEGMENT REPORTING 1192.1. Business segments(primary segment reporting) 1192.2. Geographic segments(secondary segment reporting) 1193. RISK MANAGEMENT POLICIESAND HEDGING ACTIVITIES 1193.1. Fair value of financial instruments 1203.2. Market Risks 1213.3. Balance-Sheet Management 1223.4. Credit Risk 1244. CAPITAL ADEQUACY 1254.1. BIS eligible capital 1254.2. BIS risk-weighted assets (RWAs) 125106Dexia Annual report 2009
Notes to the consolidated fi nancial statementsGeneral InformationDexia provides financial services to the local public sector andis one of the world’s largest players in Public and WholesaleBanking. In Europe, Dexia offers retail and private bankingservices but also asset management and insurance services.The parent company of the Group is Dexia SA, which is alimited liability company and is incorporated and domiciled inBelgium. The address of its registered office is:Place Rogier 11 – B-1210 Bruxelles (Belgium).Dexia is listed on the NYSE Euronext Stock Exchange in Brusselsand also on the Luxembourg Stock Exchange.These financial statements have been approved for issue bythe Board of Directors on 24 February 2010.Notes to the financial statementsThe principal accounting policies adopted in the preparationof these consolidated financial statements are set out below.The common used abbreviations below are:ARC: Accounting Regulatory CommitteeEFRAG: European Financial Reporting Advisory GroupEU GAAP: International Financial Reporting Standards asadopted by the European Union (EU)IASB: International Accounting Standards BoardIFRIC: International Financial Reporting InterpretationsCommitteeIFRS: International Financial Reporting Standard.1. ACCOUNTING POLICIES1.1. Basis of accounting1.1.1. GeneralThe consolidated financial statements of Dexia are preparedin accordance with all IFRSs as adopted by the EU.The European Commission published Regulation EC1606/2002 on 19 July 2002, requiring listed groups toapply IFRS as from 1 January 2005. This regulation has beenupdated several times since 2002.Dexia’s financial statements have therefore been prepared“in accordance with all IFRSs as adopted by the EU” andendorsed by the EC up to 31 December 2009, including theconditions of application of interest-rate portfolio hedgingand the possibility to hedge core deposits.The consolidated financial statements are prepared on agoing concern basis. They are stated in millions of euro (EUR)unless otherwise stated.1.1.2. Accounting estimatesIn preparing the consolidated financial statements, managementis required to make estimates and assumptions thataffect amounts reported. While management believes theyhave considered all available information in developing theseestimates, actual results may differ from such estimates andthe differences could be material to the financial statements.Judgments and estimates are principally made in the followingareas:• Estimation of the recoverable amount of impaired assets• Determination of fair values of non-quoted financialinstruments• Determination of the useful life and the residual value ofproperty, plant and equipment, investment property andintangible assets• Measurement of liabilities for insurance contracts• Actuarial assumptions related to the measurement ofemployee benefits obligations and plan assets• Estimation of present obligations resulting from past eventsin the recognition of provisions• Estimate of future taxable profit for the measurement ofdeferred tax assets• Judgment on impairment of financial assets• Estimate of the recoverable amount of cash-generatingunits for goodwill impairment.1.2. Changes in accounting policies since theprevious annual publication that may impactDexia Group1.2.1. New IFRS standards, IFRIC interpretationsand amendmentsThe IASB issued a new standard and two interpretations:• IFRS 9 “Financial instruments”, applicable as from 1 January2013.This standard introduces new requirements for the classificationand measurement of financial assets. It representsthe completion of the first part of a three-part project toreplace IAS 39 “Financial Instruments: Recognition andMeasurement”.The IASB issued IFRS 9 in November 2009. Dexia has assessedthe impact this new standard would have. In general, IFRS 9will result in an increased application of fair value measurementmainly due to the new principle regarding non-basicloan features attached to financial assets and the accountingprinciple for tranches issued by special purpose entities.• IFRIC 18 “Transfers of assets from customers”, which iseffective prospectively as from 1 July 2009.• IFRIC 19 “Extinguishing financial liabilities with equityinstruments” which will be effective on or after 1 July2010.The interpretation addresses divergent accounting by entitiesissuing equity instruments in order to extinguish all or partof a financial liability, often referred to as “debt for equityswaps”.These IFRIC interpretations do not have an impact on Dexia.The IASB issued a number of amendments to the existingstandards and interpretations.• Amendments to IFRS 7 “Improving disclosures aboutfinancial instruments”, applicable as from 1 January 2009.These amendments enhance disclosures about fair valuemeasurement (by introducing a 3-level hierarchy) and liquidityrisk. These amendments do not have an impact on thestatement of income nor on the balance sheet of Dexia, butonly on disclosures.• Amendments to IFRIC 9 and IAS 39 “Embedded derivatives”,applicable for annual periods ending on or after30 June 2009.These amendments require a reassessment of the embeddedderivatives at the moment of reclassification. These amendmentsdo not have impact on Dexia’s financial statements.Management reportConsolidatedfinancial statementsAnnual financial statementsAdditional informationAnnual report 2009 Dexia 107
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Group profi leSIMPLIFIED GROUP STRU
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Group profi leQUALITY OF RISKS Dexi
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2009 and early 2010 highlightsExit
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Corporate governanceIntroduction: t
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Corporate governanceThe European Ad
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Shareholder informationStock market
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Human resourcesAGE PYRAMID> 5955-59
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Sustainable developmentThe 2009 Dex
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Dexia’s annual report 2009 has be
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Annual report 2009 - Dexia.com

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