GB00_erste lage_E - Erste Group

In the case of operating leases (in this type of lease the risks and rewards associated with
the property remain with the lessor), the leased property is reported by the lessor under financial
investments and depreciated in accordance with the principles applicable to the fixed assets
involved. Leasing payments are recognised as revenue in the Income Statement in accordance
with the period of use.
9) Debts evidenced by certificates
Debts evidenced by certificates are stated at their repayment or nominal amount. Bonds issued
at a discount with long terms (e.g. zero coupon bonds) and similar debts evidenced by certificates
are reported at their present value.
10) Provisions
Pursuant to IAS 19 (Employee Benefits), all employee benefits (pension and severance payment
obligations plus anniversary bonuses) are determined using the projected unit credit method. The
pension obligations for current employees and members of the Management Board of Erste Bank
AG, Salzburger Sparkasse and s Bausparkasse were transferred in 1998 and 1999 (in some special
cases in 2000) to a retirement fund. Consequently, the provisions are made solely for the
pension obligations of retired employees and the obligations for disability pensions, which are still
based on defined benefits.
The future obligations are valued according to actuarial expert opinions. This calculation takes
into account not only those pensions and vested rights to future pension payments known at the
balance sheet date but also anticipated future rates of increase in salaries and pensions.
The most important parameters based on actuarial computation of pension obligations are
a discount rate (long-term capital market interest rate) of 5.5% annually and a raise in salary inputting
pension payments of 3.5% annually for active employees. The parameters for pension
provisions for retirees (for this portion there is no transfer to a pension fund) are a discount of
5.5% and an anticipated pension increase of 1.5% annually. The assumed retirement age is 56.5
for women and 61.5 for men.
The calculation of the severance payment obligation and anniversary bonuses is based on a
discount of 5.5% annually and an average annual raise in salary of 3.5%.
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