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

Parent company fInancial statementsFixed AssetsBuildings and equipment are stated at cost or valued inaccordance with France’s appropriation laws of 1977and 1978. Revaluation differences on non-depreciableassets, recorded at the time of these legal revaluations,are included in share capital. Assets leased by the Bankare recorded under “Tangible and intangible assets”.The restructured real estate portfolio is depreciated overa fifty-year period starting from the date of transfer usingthe straight-line method. Depreciation of other fixed assetsis computed using the straight-line method over theirestimated useful lives. The difference between taxdepreciation (accelerated method) and book depreciation(generally straight-line method) is recorded under “Regulateddeductions – Accelerated depreciation” in liabilities.No deferred income tax is calculated on the differencebetween book and tax depreciation.The capitalised cost of software purchased or developedfor internal use is recorded under “Intangible assets” andamortised by the straight-line method over the probableperiod of use of the software, not to exceed five years.Interbank and Money-market Items and Customer Items(Liabilities)Amounts due to credit institutions are classified into demandaccounts and time deposits and borrowings. Customerdeposits are classified into regulated savings accountsand other customer deposits. These captions include securitiesand other assets sold under repurchase agreements.Accrued interest is recorded on a separate line.Debt SecuritiesDebt securities are analysed between retail certificates ofdeposit, interbank market securities, negotiable certificatesof deposit, bonds and other debt instruments. This captiondoes not include subordinated notes which are recorded under“Subordinated debt”.Accrued interest on debt securities is recorded on a separateline of the balance sheet and is debited to the profit and lossaccount.Bond issue and redemption premiums are amortised bythe yield-to-maturity method over the life of the bonds.Bond issuance costs are amortised by the straight-line methodover the life of the bonds.Country Risk ProvisionsProvisions for country risks are based on the evaluationof non-transfer risk related to the future solvency of eachof the countries at risk and on the systemic credit riskincurred by debtors in the event of a constant and durabledeterioration of the overall situation and economies ofthese countries. Country risk provisions and write-backsare reflected in the profit and loss account under “Netadditions to provisions for credit risks and country risks”.Provisions for Unforeseeable Industry RisksBNP Paribas SA records provisions for unforeseeable industryand other risks in order to cover losses and expenses thatare not certain of being incurred and the amount of whichcannot be reliably estimated. These provisions are reversedand replaced by specific provisions in cases where the loss orexpense becomes certain and can be reliably estimated.Reserve for General Banking RisksBNP Paribas SA has set up a reserve for general banking risksin accordance with the principle of prudence.Specific additions to, and deductions from, this reserve arereflected in the profit and loss account under “Movementsin the reserve for general banking risks”.Provisions not Set Up in Connection with Bankingor Banking-related TransactionsBNP Paribas SA records provisions for clearly identifiedcontingencies and charges, of uncertain timing or amount.In accordance with current regulations, these provisionswhich are not connected with banking or banking-relatedtransactions may only be recorded if the Bank has anobligation to a third party at the year-end and no equivalenteconomic benefits are expected from that third party.Provisions for Credit and Country RisksProvisions for credit risks and country risks include expensesarising from counterparty risks, including country risks,litigation and fraud inherent to banking operations conductedwith third parties. Net movements in provisions forcontingencies and charges that do not fall under the abovecategory of risks are classified in the profit and loss accountaccording to their type.277BNP PARIBAS - ANNUAL REPORT 2004