Annual Report 2011 - Hong Kong Monetary Authority
Annual Report 2011 - Hong Kong Monetary Authority
Annual Report 2011 - Hong Kong Monetary Authority
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Situation at<br />
end-2010<br />
Uses and<br />
releases as<br />
designated<br />
Changes in<br />
scope of<br />
consolidation<br />
Recoveries,<br />
interests<br />
at risk and<br />
forex<br />
differences<br />
New<br />
provisions<br />
charged to<br />
profit and<br />
loss account<br />
Releases<br />
reported in<br />
profit and<br />
loss account<br />
Situation at<br />
end-<strong>2011</strong><br />
13 Valuation adjustments and provisions<br />
Reserves for general banking risks<br />
(in thousands of CHF)<br />
Provision for taxes and deferred taxes<br />
Valuation adjustments and provisions<br />
for default and other risks:<br />
- valuation adjustments and provisions<br />
36,568 - - (287) 3,126 (243) 39,164<br />
for default risks (credit and country risks)<br />
- valuation adjustments and provisions<br />
17,729 (90) - 158 197 (1,209) 16,785<br />
for other operating risks - - - - - - -<br />
- other provisions 21,074 (568) - (496) 2,837 (44) 22,803<br />
Subtotal<br />
Total valuation adjustments<br />
38,803 (658) - (338) 3,034 (1,253) 39,588<br />
and provisions<br />
Less valuation adjustments deducted<br />
75,371 (658) - (625) 6,160 (1,496) 78,752<br />
directly from assets: 14,224 13,287<br />
of which: - banks - -<br />
- customers 14,224 13,287<br />
- mortgage loans - -<br />
- financial investments - -<br />
- other<br />
Total valuation adjustments<br />
- -<br />
and provisions as per balance sheet 61,148 65,465<br />
Reserves for general banking risks 294,967 - - - 22,083 (5,316) 311,734<br />
Reflecting the Group’s cautious stance, valuation adjustments and provisions are allocated on an individual basis to all discernible risks of loss. Valuation<br />
adjustments and provisions that become economically unnecessary during the course of a financial year are released and reported under the relevant<br />
heading in the profit and loss account. Individual valuation adjustments are deducted from the relevant balance sheet items. Deferred taxes mainly relate<br />
to temporary changes in reserves for general banking risks. They are calculated based on the average tax rate foreseen at the time the balance sheet is<br />
drawn up.<br />
Reserves for general banking risks form part of consolidated shareholders’ equity. The portion accruing to the Group minority shareholders is deducted<br />
from these reserves.<br />
FINANCIAL REPORT CONSOLIDATED ACCOUNTS 83
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