Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
2. Basis of preparation (continued)
Changes in presentation
The Group made the following changes in presentation of items in the consolidated financial statements during the year 2010:
The Group has changed the presentation in the income statement of the adjustments to the carrying amount of loans and advances acquired at deep
discount which are due to changes in estimated future cash flows (see Note 25), other than those resulting from unbinding foreign currency linkage
(see Note 4(i)). The net adjustments are now presented in a separate line on the face of the income statement called "Net adjustments to loans and
advances acquired at deep discount" but they were previously included in the line item "Interest income" in the income statement. The comparison
amounts for the year 2009 in the income statement have been adjusted in accordance with the new presentation. Accordingly, the amount of
"Interest income" disclosed for the year 2009 decreased by ISK 23,772 million.
The Group has changed the presentation of the change in fair value of the contingent bond in the income statement. The change in fair value is now
presented in a separate line on the face of the income statement but it was previously included in the line "Interest expense" in the income
statement. The comparison amounts for the year 2009 in the income statement have been adjusted in accordance with the new presentation.
Accordingly, the amount of "Interest expense" disclosed for the year 2009 decreased by ISK 10,241 million.
The Group has changed the presentation in the income statement of net foreign exchange differences arising from OTC currency options, which the
Bank has bought to economicaly hedge its foreign currency imbalance (see Note 9). The net foreign exchange difference is now presented in the line
"Net foreign exchange gain (loss)" in the income statement but it was previously included in the line "Net (loss) gain on financial assets and liabilities
held for trading". The comparison amounts for the year 2009 in the income statement have been adjusted in accordance with the new presentation
as follows:
• "Net gain on financial assets and liabilities held for trading" increased by ISK 186 million;
• "Net foreign exchange gain (loss)" decreased by ISK 186 million.
The Group has changed the name of the line "Borrowings" in the statement of financial position into "Secured bonds" due to the fact that the Bank
has issued the secured bonds to Landsbanki Íslands hf. on 12 October 2010 (see Note 19) in accordance with the settlement agreement signed on 15
December 2009 in respect of the transfer of assets and liabilities from Landsbanki Íslands hf. on 9 October 2008.
Other accounting developments
The new standards and amendments to standards which became effective for the Group from 1 January 2010 had no effect on the accounting
policies applied by the Group. The revised standard IFRS 3 Business Combinations (revised 2008) and the amendments to IAS 27 Consolidated and
Separate Financial Statements (2008) have been early adopted by the Group in its consolidated financial statements for the period ended 31
December 2008.
The Group has early adopted the whole revised standard IAS 24 Related Party Disclosures (revised 2009) in these consolidated financial statements.
The revised standard amended the definition of a related party and introduced a partial exemption from the general disclosure requirements in IAS 24
in respect of related party transactions with government and government-related entities. The adoption of the revised IAS 24 has impacted only the
disclosures provided by the Group in respect of transactions with government and government-related entities as the Group chose to apply the
partial exemption provided in IAS 24 (see Note 40). The Group has applied the revised IAS 24 retrospectively, in accordance with its transitional
provisions.
NBI hf. Consolidated Financial Statements 2010 11
All amounts are in ISK million
Allar upphæðir eru í milljónum króna Ársreikningur 2010 111