2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

Consolidation policies and valuation principles
General accounting policies
Julius Baer Holding Ltd. is a Swiss corporation.
Amounts in the annual financial statements are
stated in thousands of Swiss francs. The consolidated
financial statements were prepared in compliance
with the International Financial Reporting Standards
(IFRS) and employed the historical cost principle,
with the exception of the trading positions, derivative
financial instruments and available-for-sale financial
investments, which are measured at fair value.
Use of estimates in preparing the consolidated
financial statements
In preparing the consolidated financial statements,
management is required to make estimates and
assumptions that affect reported income, expenses,
assets, liabilities and disclosure of contingent assets
and liabilities. Actual results in the future could differ
from such estimates.
Consolidation policies
Method of consolidation
The consolidation of capital is based on the purchase
method, i.e. capital is consolidated on the date of
acquisition.
The consolidated financial statements include, in
addition to the figures for Julius Baer Holding Ltd.,
the results from participations according to the following
rules:
Consolidated participations
Group companies in which Julius Baer Holding Ltd.
directly or indirectly owns a majority of the voting
stock, or in which it exercises control in some other
way, are fully consolidated. A complete list of these
companies is provided on pages 124 to 127. All internal
Group claims, liabilities, off-balance-sheet transactions,
expenses and income are eliminated. The
interest of minority shareholders in the equity and
Notes
net profit are stated in the consolidated balance
sheet within the equity position and in the consolidated
income statement as net profit attributable to
minority interest.
Non-consolidated participations
Investments in entities in which Julius Baer Holding
Ltd. holds between 20% and 50% of the voting stock
and/or over which it can wield significant influence
(associates) are reported in the consolidated
accounts using the equity method. These companies
are recorded in the consolidated financial statements
according to the percentage share of the Group in
their equity and net profit. The remaining participations
are included in the balance sheet at fair value in
available-for-sale financial investments.
Currency translation
The Group companies prepare their financial statements
in the respective functional currency. The balance
sheets of Group companies that are denominated
in foreign currencies are translated into Swiss
francs at the closing exchange rate on the balance
sheet date. An average exchange rate for the year is
used for the income statements. Exchange differences
arising from consolidation are shown as accu-
The following exchange rates are used for the major currencies:
Year-end rates Average exchange
rates for the year
31.12.2004 31.12.2005 2004 2005
USD/CHF 1.1371 1.3178 1.2394 1.2510
EUR/CHF 1.5457 1.5546 1.5441 1.5480
GBP/CHF 2.1833 2.2626 2.2730 2.2660
JPY/CHF 1.1097 1.1166 – –
JULIUS BAER GROUP 69