ANNUAL REPORT 2008 - Polymer Bank Notes of the World

materially affect the condition of assets andliabilities at the Balance Sheet date.Important post-balance-sheet events that do notaffect the condition of assets and liabilities at theBalance Sheet date are disclosed in the notes.INTRA-ESCB BALANCES/INTRA-EUROSYSTEMBALANCESIntra-ESCB transactions are cross-bordertransactions that occur between two EUcentral banks. These transactions are processedprimarily via TARGET2 3 – the Trans-EuropeanAutomated Real-time Gross settlement ExpressTransfer system (see Chapter 2) – and giverise to bilateral balances in accounts heldbetween those EU central banks connected toTARGET2. These bilateral balances are thenassigned to the ECB on a daily basis, leavingeach NCB with a single net bilateral positionvis-à-vis the ECB only. This position in thebooks of the ECB represents the net claim orliability of each NCB against the rest of theESCB.Euro-denominated intra-ESCB balances ofthe euro area NCBs with the ECB (except forthe capital of the ECB and positions resultingfrom the transfer of foreign reserve assets tothe ECB) are described as intra-Eurosystemclaims or liabilities and are presented in theBalance Sheet of the ECB as a single net assetor liability position.Intra-Eurosystem balances arising fromthe allocation of euro banknotes within theEurosystem are included as a single netasset under “Claims related to the allocationof euro banknotes within the Eurosystem”(see “Banknotes in circulation” in the notes onaccounting policies).Intra-ESCB balances of non-euro area NCBswith the ECB, arising from their participation inTARGET2, 4 are disclosed under “Liabilities tonon-euro area residents denominated in euro”.TREATMENT OF FIXED ASSETSFixed assets, with the exception of land,are valued at cost less depreciation. Land isvalued at cost. Depreciation is calculated on astraight-line basis, beginning in the quarter afteracquisition and continuing over the period forwhich the asset is expected to be available foruse, as follows:Computers, related hardware andsoftware, and motor vehiclesEquipment, furniture and plant inbuildingFixed assets costing less than €10,000The depreciation period for capitalised buildingand refurbishment expenditure relating to theECB’s existing premises has been reduced inorder to ensure that these assets are completelywritten off before the ECB moves to its newpremises.THE ECB’S RETIREMENT PLAN AND OTHERPOST-EMPLOYMENT BENEFITSThe ECB operates a defined benefit schemefor its staff. This is funded by assets held in along-term employee-benefit fund.BALANCE SHEET4 years10 yearsWritten off in theyear of acquisitionThe liability recognised in the Balance Sheet inrespect of the defined benefit plans is the presentvalue of the defined benefit obligation at theBalance Sheet date, less the fair value of planassets used to fund the obligation, adjusted forunrecognised actuarial gains or losses.3 The technically decentralised first-generation system wasprogressively replaced by a second-generation system(TARGET2) system, which is based on a single technicalinfrastructure, the Single Shared Platform (SSP). The migrationto TARGET2 started in November 2007 and was completed inMay 2008.4 As at 31 December 2008, the non-euro area NCBs participatingin TARGET2 were: Danmarks Nationalbank, Latvijas Banka,Lietuvos bankas, Narodowy Bank Polski and Eesti Pank.ECBAnnual Report2008221