consolidated annual report - Gruppo Banca Sella

Consolidation criteria
Equity investments in controlled companies belonging
to the banking Group were consolidated line by line.
The acquisition value of equity investments in line by
line consolidated companies is offset by the respective quo-
tas of the Group in the subscribed capital, reserves, share
premium account and reserve for general banking risks
at the moment of the first consolidation (by agreement
brought forward to 1 January 1993, date in which the Law
by Decree 87/92 became effective) or of the acquisition, if
after that date.
Positive goodwill resulting from the comparison between
the equity investments belonging to the Group and
the value of the equity investment, after any entry into
assets and revaluation reserves, have been deducted from
negative goodwill up to the amount of the latter. The residual
amount was entered into Consolidated Balance Sheet
assets and is amortized in 10 years, consistent with the
future benefits deriving from investments and with the
period necessary to the integration of the organizational
structure of subsidiaries.
Higher amortizations were entered in the Income
Statement for the financial year, following book value depreciations
of some of the consolidated equity investments
made by the single participants, for an amount equal to the
difference between the depreciation that was made (which
was offset in the Consolidated Financial Statements) and
amortizations of positive goodwill deriving from consolidation
of the same equity investments entered into the Consolidated
Income Statement.
Participations in controlled companies which do not
enter into the area of the banking Group, as well as other
significant investments, are valued applying the equity
method, with the exception of Fiduciaria Banknord S.p.A.,
which was not the object of consolidation, as the related
participation will be divested.
The higher acquisition value with respect to the corresponding
part of shareholders’ equity was entered into
balance sheet assets and amortized in 10 years.
Net profit and minority interests quotas were separately
highlighted in the Consolidated Income Statement and
in consolidated Balance Sheet liabilities.
The conversion of balance sheets in currencies different
from the currency used for accountancy of the Group
(euro) was made applying to each single caption of the balance
sheet and of the income statement the exchange rates
as at end of the financial year. The differences, originated
by the conversion of shareholders’ equity captions of the
preceding year using exchange rates current at the end of
the financial year, were entered directly in the consolidated
shareholders’ equity.
The relations between consolidated companies were
removed, in particular:
• assets and liabilities relations and off-balance sheet
operations;
• profits and charges relevant to operations;
• profits and losses resulting from dealing among
Group companies on securities, currencies, financial
instruments and other values included in assets,
having a significant value or transacted at values different
from market value.
Loans
Loans to customers and to banks are stated on their
granting. As regards current account transactions, advances
and other grants, disbursement coincides with the
moment of the performance of the transaction. As regards
other transactions (bills, foreign transactions, securities),
disbursement coincides with settlement date, conventionally
being the debit or credit value date of the amounts on
the customers’ or banks’ accounts.
The accounts are purged of any illiquid items, and the
relevant net excess/deficit is stated among other assets
and/or liabilities in the Balance Sheet.
The original value of loans is determined as follows:
• bills discounted and advances on bills subject to collection
are entered at nominal value; interest to be
accrued are entered in "Deferred income";
• current accounts: balances include interest and expenses
related to the annual closing of accounts (even if due
in the following year) as well as pending transactions
at period end if relevant to the accounts in object;
• loans, deposits, financings and other grants are entered
for their residual value of principal, besides
Consolidated annual report 2004 - 223