saxo-bank-annual-report-2015

NOTES – SAXO BANK GROUP
Note
1 Accounting policies · continued
Deferred tax assets and liabilities are offset if the Group has a legal right to offset current tax liabilities and tax assets or intends to settle current
tax liabilities and tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously.
Deferred tax is measured on the basis of the tax regulations and tax rates enacted or substantively enacted at the reporting date. Changes in deferred
tax as a result of changes in tax rates are recognised in the income statement or statement of comprehensive income.
Shareholders’ equity
Translation reserve
The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign entities arisen on
or after 1 January 2010. The reserve also includes translation of derivative financial instruments that hedge the Group’s net investment in foreign
entities.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet affected profit or loss.
Revaluation reserve
The revaluation reserve comprises revaluations of domicile properties after the recognition of deferred tax. Subsequent depreciation net of tax of
the revaluation is transferred from the revaluation reserve to retained earnings.
Proposed dividends
Proposed dividend is recognised as a liability at the time of adoption at the annual general meeting (time of declaration). Dividend proposed to be
distributed for the year is included in Shareholders’ equity until adoption of the dividend proposal.
Treasury shares
Treasury shares are not recognised as assets. Proceeds related to acquisition or disposal of treasury shares are recognised directly in Retained earnings
in Shareholders’ equity.
Additional tier 1 capital
Tier 1 capital issued includes no contractual obligation to deliver cash or another financial asset to the holders, as Saxo Bank A/S may, at its sole
discretion, omit payment of interest and principal payments to the bond holders. Therefore, the issue does not qualify as a financial liability according
to IAS 32. The net amount received at the date of issue is recognised as an increase in equity. Interest is recognised as distribution to owners
directly in equity. If Saxo Bank A/S chooses to redeem the bonds, equity will be reduced by the redemption amount at the date of redemption.
Additional tier 1 capital under Equity comprises proceed received at the date of insurance and accrued interest not yet paid to the holders.
Non-controlling interests
Non-controlling interests comprise the share of the shareholders’ equity not owned directly or indirectly by Saxo Bank A/S, equalling the carrying
amount of the net assets in subsidiaries not owned or controlled directly or indirectly by Saxo Bank A/S.
CASH FLOW STATEMENT
The cash flow statement is prepared according to the indirect method. The cash flow statement is based on the profit before tax for the year and
shows cash flows from operating, investing and financing activities and the increase or decrease in cash and cash equivalent during the year.
Cash and cash equivalents comprise cash in hand and demand deposits with central banks and receivables from credit institutions and central
banks with original maturity less than three months.
NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) AND INTERPRETATIONS
IASB has published the following standards and amendments to existing standards that are not yet mandatory for the preparation of the consolidated
financial statements of the Group for the year ended 31 December 2015:
• IFRS 9 Financial Instruments
• IFRS 14 Regulatory Deferral Accounts
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases
• Amendments to IFRS 10, IFRS 12 and IAS 28: Investment in Entities: Applying the Consolidation Exception
• Amendments to IFRS 10 and IAS 28: Sale and Contribution of Assets between an Investor and its Associate or Joint Venture
• Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
The Group adopts the new standards and amendments when they become mandatory in EU.
None of the standards and amendments are expected to have a material impact on the consolidated financial statements. However a complete
analysis of the impact of implementation of IFRS 9 and IFRS 16 (issued 13 January 2016) is to be composed. IFRS 9 and IFRS 16, which have not
yet been adopted by the EU, are effective from respectively 1 January 2018 and 1 January 2019.
54 · SAXO BANK · ANNUAL REPORT 2015