Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
20. Contingent bond
According to the provisions of the settlement agreement signed on 15 December 2009, the Bank might have to issue to Landsbanki Íslands hf. a bond
on 31 March 2013 as an additional consideration for the assets and liabilities transferred from Landsbanki Íslands hf. on 9 October 2008. The
contingent bond can have a nominal amount of up to ISK 92 billion, with the amount being contingent on whether the value of certain pools of
assets, to be determined as at 31 December 2012, exceeds the future value of the acquisition price of those assets agreed for as at 9 October 2008,
subject to specified adjustments. The value will be determined by a third-party valuation agent based on agreed-upon valuation procedures. The
additional value at year-end 2012 that might exceed the future value of the 2008 acquisition price would be divided between Landsbanki Íslands hf.,
which would be assigned 85% (though no higher than ISK 92 billion) and the Bank, 15%. If issued, this bond would be denominated in EUR or such
other currencies as may be agreed between the Bank and Landsbanki Íslands hf., whereby the ISK nominal amount would be converted into EUR
using the exchange rate at 31 December 2012. The bond would bear floating interest rate and it would mature in October 2018 with quarterly
instalments starting in 2014.
The contingent obligation of the Bank is classified as a financial liability and measured initially at fair value. Subsequently, it is measured at fair
value, with any resulting gain or loss recognised in the line item "Fair value change of contingent bond" in the consolidated income statement.
21. Tax assets and liabilities
Tax assets and liabilities are specified as follows:
Tax assets 2010 2009
Deferred tax assets 1,522 6,682
Tax liabilities
Current tax liabilities 1,979 83
Deferred tax liabilities - -
Total 1,979 83
Recognised deferred tax assets and liabilities are attributable to the following:
2010 2009
Assets Liabilities Net Assets Liabilities Net
Property and equipment - (1,943) (1,943) - (2,342) (2,342)
Investments in associates - (101) (101) - (140) (140)
Loans and advances to customers 4,301 - 4,301 6,382 - 6,382
Other assets - (43) (43) - (68) (68)
Deferred foreign exchange differences - (1,714) (1,714) 357 - 357
Other items - (168) (168) - (253) (253)
Tax losses carried forward 1,190 - 1,190 2,746 - 2,746
Set-off of deferred tax assets together
5,491 (3,969) 1,522 9,485 (2,803) 6,682
with liabilities of the same taxable entities (3,969) 3,969 - (2,803) 2,803 -
Total 1,522 0 1,522 6,682 0 6,682
The deferred tax assets and liabilities are measured based on the tax rates and tax laws enacted by the end of 2010, according to which the domestic
corporate income tax rate was 20%. In December 2010 the corporate income tax rate was increased from 18% to 20%. This change is effective for
the fiscal year starting on 1 January 2011.
NBI hf. Consolidated Financial Statements 2010 36
All amounts are in ISK million
136 Ársreikningur 2010 Allar upphæðir eru í milljónum króna