La banque d'un monde qui change 2004 - BNP Paribas

Consolidated FInancial statementsNOTE 1 – ACCOUNTING POLICIES (CONT’D)the unamortised goodwill is written off. This is the case,in particular, following a capital transaction that hasthe effect of diluting the interest of the company holdingthe shares.Intercompany Balances and TransactionsIncome and expenses on material intercompany transactionsinvolving fully or proportionally consolidated companies orcompanies accounted for by the equity method are eliminatedin consolidation. Intercompany receivables, payables,commitments, income and expenses between fully orproportionally consolidated companies are also eliminated.Lease FinancingFinance leases where the Group is lessor are recorded inthe consolidated balance sheet under “Leasing receivables”in an amount corresponding to the net investment inthe lease and not the net book value in the individualcompany accounts determined in accordance with legaland tax rules. Lease payments are analysed betweenamortisation of the net investment and interest income.Deferred taxes are recorded on the total difference betweenaccumulated book depreciation of the leased assets andaccumulated amortisation of the net investment in the lease.This difference is recorded under “Shareholders’ equity” netof deferred taxes.Foreign Currency TranslationAll monetary and non-monetary assets and liabilitiesof foreign subsidiaries and branches that are denominatedin foreign currencies are translated at the year-end exchangerate. Differences arising from the translation of profitand loss account items of foreign subsidiaries at the averagerate for the period and the period-end rate are recordedin shareholders’ equity, under ”cumulative translationadjustment”, net of minority interests. The same accountingtreatment is applied to differences arising from the translationof capital made available to foreign branches. Differencesarising from the translation of the results of foreign branchesare treated as operating positions that can be repatriatedand are therefore recognised in the consolidated profitand loss account.BNP Paribas Shares Held within the GroupBNP Paribas shares held within the Group are valued andaccounted for as follows:• Shares acquired in order to stabilise the share price or inconnection with index trading and arbitrage transactionsare recorded under “Trading account securities” at theirmarket price.• Shares held for allocation to employees are recordedat the lower of cost and market price under “Securitiesavailable for sale”. Where appropriate, a provisionis booked for the difference between the cost of the sharesand the exercise price of the related employee stockpurchase options.• Shares not acquired specifically for any of the abovepurposes or that are intended to be cancelled are deductedfrom consolidated shareholders’ equity at cost. If the sharesare subsequently sold instead of being cancelled, the gainor loss on disposal and the corresponding tax are posted toretained earnings.Consolidation of Insurance CompaniesThe specific accounting principles and valuation rulesapplicable to insurance companies are also used forBNP Paribas consolidation purposes. The balance sheet,profit and loss account and off-balance sheet items of fullyconsolidated insurance subsidiaries are included undersimilar captions in the consolidated financial statements,with the exception of the following items:• Insurance Company InvestmentsThe investments of insurance companies include admissibleassets related to unit-linked business, as well as propertyinvestments and various other investments, including sharesin related companies, concerning life and other business.Property investments are stated at cost, excluding transactioncosts. Buildings are depreciated over their estimated usefullives. Admissible assets related to unit-linked businessare stated at the realisable value of the underlying assetsat the year-end.Fixed or variable income marketable securities are stated atcost. Fixed income securities are valued and accounted forusing the same method as debt securities held to maturity.201BNP PARIBAS - ANNUAL REPORT 2004