GB00_erste lage_E - Erste Group

Trading assets All trading assets are reported in the Balance Sheet as a separate item according
to IAS. This item is mainly comprised of the securities held in the trading portfolio stated at fair
value and the positive fair value of derivatives transactions that were not yet settled at the balance
sheet date.
Investments available for sale In accordance with IAS, securities that are neither classified as
trading assets nor as financial investments (liquidity reserves) are reported under this item. As
before, such assets are valued at the lower of cost or market.
Financial investments In accordance with IAS, this item is comprised of long-term investments,
securities held as financial investments and other financial investments (particularly leased prop-
erties).
Intangible fixed assets Intangible fixed assets generated internally must be capitalised according
to IAS if the requirements for capitalising assets are met, whereas the Austrian Commercial Code
prohibits capitalisation of such assets.
Purchased goodwill must be capitalised according to IAS and written off on a straight-line basis
over its useful life. According to the Austrian Commercial Code, such assets may be deducted
from equity.
Employee benefits According to IAS, the actuarial calculation of employee benefits (applying the
projected unit credit method) takes into account the expected forecast increase in salaries. A long-
term capital market interest rate is used as the discount rate.
Pension provisions for active employees and Management Board members at Erste Bank AG
and Salzburger Sparkasse were transferred to a pension fund effective 1 January 1998. Effective
1 January 1999 pension provisions for active employees and Management Board members at
s Bausparkasse were also transferred. This transfer also marked the transition for employees
active at that point from the defined benefit plan to the contribution principle.
Deferred taxes In calculating and reporting deferred taxes pursuant to IAS, the liability-based temporary
concept is applied, which compares the carrying amounts of the assets and liabilities with
the respective tax basis. Variances in these amounts lead to temporary differences in value, which
justify deferred tax assets and deferred tax liabilities regardless of when these differences cease
to exist. According to IAS, these deferred items must be reported, whereas under the Austrian
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