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

Consolidated FInancial statementsNOTE 1 – ACCOUNTING POLICIES (CONT’D)prudence, the deferred portion of the actuarial difference islimited in all cases to an amount equivalent to that of the netchange in the benefit obligation over the year.For defined contribution plans, the Group records thecontributions as an expense in the period they are paid.Other Employee BenefitsUnder various agreements, the BNP Paribas Group iscommitted to pay early retirement, retirement and senioritybonuses, healthcare costs and other benefits to its employeesin France and in most of the countries in which the Groupdoes business.Each year, BNP Paribas estimates the net present value ofthese commitments and adjusts the related provision, applyingthe same method as for pension benefits.Recognition of Revenue and ExpenseInterest and fees and commissions qualified as interest arerecognised on an accruals basis. Fees and commissions notqualified as interest that relate to the provision of services arerecognised when the service is performed.Net Additions to Provisions for Credit Risksand Country RisksNet additions to provisions for credit risks and countryrisks include expenses arising from the identification ofcounterparty risks, including country risks, litigation and fraudinherent to banking operations conducted with third parties.Net movements in provisions for contingencies and chargesthat do not fall under the category of such risks are classifiedin the profit and loss account according to their type.Foreign Currency TransactionsForeign exchange positions are generally valued at theofficial year-end exchange rate. Exchange gains and losseson transactions in foreign currency carried out in the normalcourse of business are recorded in the profit and loss account.Exchange differences arising from the conversion at the yearendexchange rate of assets denominated in foreign currenciesthat are held on a long-term basis, including equity securitiesheld for long-term investment, the capital made availableto branches and other foreign equity investments, are notrecognised in the profit and loss account.209BNP PARIBAS - ANNUAL REPORT 2004