A nnual R eport D ecember 31, 2009 D reyfus S ons & C o B ...

tioned to accounting periods as Interest and Dividend
Income from Financial Assets. Equity securities are valued
at the lower of cost or market. The cost is determined
by weighted averages of the purchase prices.
• Majority owned participations are presented at acquisition
cost net of any operational write-downs as per
aggregate valuation.
• As a rule, fixed assets are written off in the year of
acquisition. Most of the bank buildings were purchased
generations ago and therefore the value shown in the
balance sheet is significantly below the fire insurance
value. Maintenance and renovation costs are debited
to the profit and loss account when incurred. Major
capital expenditures are mostly financed by provisions
accumulated in advance. The fixed assets are being
regularly reviewed and their valuations are adjusted
when needed.
• Taxes owed on income and capital as part of current
earnings are booked under liabilities as prepayments
and accrued income.
• Forward positions are valued at prices based on resi dual
time to expiration. Derivative financial instruments
held for trading purposes are valued at market prices.
Transactions entered into for hedging purposes are
valued by the same method as applied to the underlying
instruments. Replacement values of derivative financial
instruments include positions of both the bank and of
its customers.
• For all risks known at balance sheet date, provisions
and individual value adjustments are made. Contingent
risks are covered by overall adjustments and provisions.
The reckoning thereof is made according to internal
rules following various methods and objectives. In the
position Value adjustments and provisions the market
risks are calculated according to the value at risk and
operational risks according to the Basic Indicator
approach of Basel II.
• The accounting and valuation principles remain
unchanged.
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