ourexpertise - Crédit Agricole CIB

5PARENT-COMPANY STATEMENTSUp-front and termination fees regarding interest rate or foreignexchange contracts are spread over the remaining maturity ofthe transaction or hedged item, except in the case of marked-tomarketcontracts, for which they are taken directly to the incomestatement.Other interest-rate or equitytransactionsCrédit Agricole CIB uses various instruments such as interestratefutures and equity derivatives for trading or specifi c hedgingpurposes.Contracts concluded for trading purposes are stated at marketvalue, and the corresponding gains or losses are taken to theincome statement.Gains or losses, realised or unrealised, resulting from the markto-marketvaluation of specifi c hedging contracts are spread overthe maturity of the hedged instrument.Credit derivativesCrédit Agricole CIB uses credit derivatives mainly for hedgingpurposes, in for of Credit Default Swaps (CDS). CDSs are recognisedas forward fi nancial instruments, and premiums paid arerecorded on a prorate basis in the income statement. Contractsconcluded for trading purposes are stated at market value, andthe corresponding gains or losses are taken to the income statement.Complex transactionsA complex transaction is a synthetic combination of instrumentsof identical or different types and valuation methods. These transactionsare recognised as a single batch or as a transactionwhose recognition is not governed by any explicit regulations,with the result that it is up to Crédit Agricole CIB to choose anaccounting policy. The purpose of this choice is to refl ect the economicreality of the transaction in accordance with the principlesof fair presentation and substance over form.Foreign exchange transactionsForeign currency-denominated assets and liabilities are translatedat year-end exchange rates. The resulting gains and losses,together with gains and losses arising from exchange rate differenceson transactions during the period, are taken to the incomestatement.Monetary receivables and payables, along with forward foreignexchangecontracts that appear as foreign-currency off-balancesheet commitments, are translated at the market rate in force atthe balance-sheet date or at the market rate on the nearest previousdate.Spot and forward foreign exchangecontractsAt each period end, spot foreign exchange contracts are valuedat the spot exchange rate of the currency concerned.Forward foreign exchange transactions categorised as tradingtransactions are recognised at market value using the forwardrate applicable to the remaining period of the contract. Recordednet gains or losses are entered in the income statement under«Net gain/(loss) from trading portfolios – foreign exchange andsimilar fi nancial instruments«.Net gains and losses on forward foreign exchange transactionsthat are categorised as spot exchange transactions in connectionwith loans and borrowings, are recognised on a prorate basisover the period of the contracts.Currency futures and optionsCurrency futures and options are used for trading purposes aswell as to hedge specifi c transactions.Contracts concluded for trading purposes are stated at marketvalue, and the corresponding gains or losses are taken to theincome statement.Gains or losses, realised or unrealised, resulting from the markto-marketvaluation of specifi c hedging contracts are recognisedsymmetrically to the hedged transaction.Integration of branches outside FranceBranches keep their own accounts in accordance with accountingrules in force in the countries in which they are located.At accounts closing, the balance sheets and income statementsof branches are adjusted according to French accounting rules,translated into euros and included in the head-offi ce accountsafter eliminating reciprocal transactions.The balance sheets and income statements of foreign branchesare translated into euros at year-end exchange rates.The gains or losses that may result from this translation are recordedon the balance sheet under «Accruals, prepayments andsundry assets and liabilities«.226SHELF-REGISTRATION DOCUMENT CRÉDIT AGRICOLE CIB 2010