ourexpertise - Crédit Agricole CIB

PARENT-COMPANY STATEMENTS 5In the event that held-to-maturity securities are sold or transferredto another category of securities, in a signifi cant amount relativeto the total amount of held-to-maturity securities held by theentity, the entity is no longer authorised to classify securities previouslyacquired and to be acquired as held-to-maturity securitiesduring that year and for two subsequent years, in accordancewith CRC regulation 2005-01, excluding the exceptions specifi edby this regulation and by CRC regulation 2008-17.Portfolio securitiesIn accordance with CRC regulation 2000-02 and with the 2000-12 Autorité de Contrôle Prudentiel instructions, securities in thiscategory comprise investments made on a regular basis with thesole aim of securing a capital gain in the medium term, with nointention of investing in the longer term in the development of theinvestee company’s business or of becoming actively involved inits operational management.In addition, securities can only be transferred to this portfolio ifthe signifi cant and permanent activity is carried out within a structuredframework and generates regular income, mainly comingfrom disposal gains.Crédit Agricole CIB meets these conditions and can classify someof these securities in this category.Portfolio securities are recorded at acquisition price, excludingincidental purchase costs.On the accounts closing date, these securities are measured atthe lower of cost or value in use, which is determined by takinginto account the issuer’s general prospects and the estimatedremaining term of ownership.For listed companies, value in use is usually the average marketprice assessed over a suffi ciently long period (taking into accountthe planned term of ownership) to offset the effect of temporarysharp variations in the share price.Any unrealised capital losses are calculated for each security, andare subject to impairment without netting of unrealised capitalgains. Unrealised gains are not recognised. They are recorded inthe «Net gain/(loss) from investment portfolios and similar« item.Unrealised gains are not recognised.Investments in affiliates, nonconsolidatedsubsidiaries andother long-term securities• Investments in affi liates are shares in companies over whichCrédit Agricole CIB (SA) has sole control and that are or may befully consolidated in the same consolidated whole.• Investments in non-consolidated subsidiaries are securities(other than shares in a related company) of which the otherthan-temporaryownership is deemed useful for the businessof a credit institution, including because it allows it to exert influence or control over the issuer.• Other long-term securities consist of securities held with theintention of promoting long-term business relations by creatinga special relationship with the issuer, but with no infl uence onthe issuer’s management due to the small percentage of votingrights held.These securities are recognized at their purchase price includingincidental purchase costs in accordance with CRC regulation2008-07.At period-end, the securities are measured individually on thebasis of their fair value, and are stated on the balance sheet at thelower of cost or fair value.The fair value of these securities is the sum the bank would agreeto pay to acquire them, taking into account its ownership objectives.Fair value can be estimated on the basis of various factors suchas the profi tability and earnings outlook of the issuing company,its shareholders’ equity, the economic situation, the average listedprice in the last few months and the security’s mathematical value.Where the fair value of a security is lower than acquisition cost,the unrealised loss is recognised through impairment, with no offsetagainst unrealised gains.Additions and releases from impairment, together with disposalgains and losses, relating to these securities are recorded under«Net gain/(loss) on disposal of non-current assets«.Market priceThe market price at which the various categories of securities aremeasured is determined as follows:• securities traded on an active market are measured at the latestprice,• if the market on which the security is traded is not or no longerconsidered active or if the security is unlisted, Crédit AgricoleCIB determines the likely value at which the security concernedwould be traded using valuation techniques. In the fi rst instance,these techniques take into account recent transactionscarried out in normal competition conditions. If required, CréditAgricole CIB uses valuation techniques commonly used bymarket participants to price these securities, when it has beendemonstrated that these techniques provide reliable estimatesof prices obtained in actual market transactions.Recording datesCrédit Agricole CIB records securities classifi ed as held-to-maturitysecurities on the settlement date. Other securities, regardlessof type or classifi cation, are recorded on the trade date.Reclassification of securitiesIn accordance with CRC regulation 2008-17 of 10 December2008, the following reclassifi cations of securities are now authorized:• from the «held-for-trading« portfolio to the «held-to-maturity« or«available-for-sale« portfolios in an exceptional market situationor in the case of fi xed-income securities that are no longer tradableon an active market, and if the institution intends and isable to hold them for the foreseeable future or until maturity;• from the «available-for-sale« to the «held-to-maturity« portfolioin an exceptional market situation or in the case of fi xed-incomesecurities that are no longer tradable on an active market.SHELF-REGISTRATION DOCUMENT CRÉDIT AGRICOLE CIB 2010 223