GB00_erste lage_E - Erste Group

All realised and unrealised gains from such positions are shown in the Income Statement under
the net trading result. Also included in this item are interest and dividend income stemming from
the trading portfolio and the incurred funding interest.
4) Investments available for sale
Securities which, according to the Group’s internal guidelines, are assigned neither to the trading
portfolio nor to financial investments because they are defined as a liquidity reserve for business
reasons are reported under this item according to the strict principle of lower of cost or market.
The price gains of this portfolio—realised or unrealised—are included under Other operating
results.
5) Financial investments
This balance sheet item contains bonds and other fixed-income securities, shares and other variable-yield
securities, investments in associates as well as ownership rights in non-consolidated
companies and property intended primarily for leasing to outside parties.
Investments in associates are valued according to the equity method. Other equity holdings
are valued at cost and, in cases where the impairment of value appears permanent, are written
off accordingly. Equity holdings that are intended for sale in the short to medium term are stated
at their fair value (for listed investments at the quoted price) at the balance sheet date.
All financial investments are reported at cost (for leased property less normal periodic depreciation)
using the cost method permitted by IAS 40. Depreciation is deducted for permanent impairment
of value and if the reasons which led to the depreciation cease to apply, the depreciation
is reversed back up to the original cost.
The derivative instruments used to hedge market, interest rate and currency risks are stated
at the same value as the underlying asset of the transaction reported in the Balance Sheet.
Erste Bank 2000 79