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80 NOTES / ACCOUNTING AND VALUATION PRINCIPLES
(11) Goodwill
Significant positive differences arising from capital and equity consolidation after 1 January 1995 are allocated to
the subsidiary's assets. Other positive amounts are entered as goodwill and are written off over a period of five to
fifteen years. Goodwill arising after 1 April 2004 is no longer amortised over a set time period; instead it is tested
for impairment. The results are presented as intangible assets under other assets. Differences which arose up to
31 December 1994 were offset against retained earnings. Amortisation of goodwill is shown under other operating
results. Negative differences arising out of capital and equity consolidation, where negative effects at the time
of acquisition could be foreseen at the time IFRS consolidated financial statements were first prepared, are now
reported as “negative goodwill” under intangible assets. Negative differences that have arisen since 1 April 2004
are immediately shown on the Income Statement.
(12) Property and equipment
Property and equipment comprises land and buildings used by the Bank and by outside parties as well as office
furniture and equipment. Land and buildings used by the Bank serve mainly for the Bank’s own operations. The
item “land and buildings used by outside parties” includes those that function as investments and are let to outside
parties.
1. Land and buildings used by the Bank as well as office furniture and equipment are entered at acquisition
cost less planned straight-line depreciation. The assumed projected periods of use are:
Buildings 45 to 50 years
Office furniture and equipment 3 to 10 years
Vehicles 8 years
IT investments 2.5 to 5 years
2. Low-value assets costing up to EUR 400.00 are fully written off in the year they are acquired.
3. Land and buildings used by third parties that function as investments are recognised at their fair value in
accordance with IAS 40. Land and buildings inside Austria are valued internally according to the Royal Institution
of Chartered Surveyors’ (RICS) standard. Land and buildings abroad are valued by external experts
according to guidelines that are recognised not only by the IVSC (International Valuation Standards Committee)
but also by TEGOVA (The European Group of Valuers' Associations). The gross rental method is used in
calculations, on the basis of current rental lists and assumptions concerning market developments and interest
rates. The change in the value of buildings between balance sheet dates is carried in the Income Statement
under net interest income.
(13) Intangible assets
Intangible assets include goodwill as well as software purchases. Goodwill purchased between 1 January 1995 and
31 March 2004 is written off over a period of ten to 15 years, and similar items arising before 1 January 1995 are
offset against equity. Goodwill purchased since 1 April 2004 is only subject to an annual impairment test. Software
is written off by the straight-line method over four years. Intangible investments are presented under other
assets.
(14) Liabilities
Liabilities are capitalised at cost. Premiums and discounts are distributed over the term of the debt. Zero coupon
bonds are shown at their cash value.