Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
22. Other liabilities
2010 2009
Unsettled securities trading 2,730 872
Withholding tax 2,893 3,927
Excess payments on lease and loan agreements (see Note 4(i)) 7,182 -
Accounts payable 826 586
Unpaid contribution to the Depositors' and Investors' Guarantee Fund 680 680
Tax on liabilities of financial institutions 400 -
Sundry liabilities 3,991 2,112
Total 18,702 8,177
Unsettled securities trading were settled in less than three days from the reporting date.
Unpaid contribution to the Depositors' and Investors' Guarantee Fund
According to Act No. 98/1999 on Deposit Guarantees and Investor Compensation Schemes, the Bank must, by 1 June of each year, contribute to the
Depositors' and Investors' Guarantee Fund ("the Fund") an amount equivalent to 0.15% of the average of guaranteed deposits in the Bank, in the
event of total Fund assets not equalling a minimum of 1% of the average amount of guaranteed deposits in commercial banks and savings banks
during the preceding year. At the same time, the Bank must also submit to the Fund a declaration of liability whereby the Bank undertakes to render
a special contribution to the Fund should the Fund become obliged to refund deposits to customers. This declaration of liability covers the proportion
of the amount required to make up the minimum 1% of the average amount of guaranteed deposits. However, demands for contributions to the
Fund based on declarations of liability may not exceed the equivalent of one-tenth of the Fund's minimum total assets.
The Bank's management has concluded that the amount to be recognised as a liability in respect of the 0.15% yearly contribution shall only equal
the amount that the Bank has no realistic alternative but to settle at each reporting date in accordance with the Act. This is the amount of the
0.15% contribution to be made by the Bank during the following calendar year, in respect of the current calendar year. Other regular contributions to
be made by the Bank to the Fund in future years do not exist independent of the Bank's future actions and therefore do not represent a present
obligation of the Bank at the reporting date. Accordingly, they are not recognised as part of the liability towards the Fund. Therefore, the amount
recognised as liability as at 31 December 2010 amounts to ISK 680 million to be paid no later than 1 June 2011 (31 December 2009: ISK 680 million,
paid to the Fund in March 2010).
In respect of the declaration of liability of the Bank, the management of the Bank has concluded that a liability should be recognised in the
statement of financial position in respect of its declaration outstanding at each reporting date only if an outflow of Bank resources is at the
respective reporting date deemed more likely than not to occur. The Bank issued its first declaration of liability to the Fund in November 2009, for a
maximum amount of ISK 33,769 769 million million, of which no more than ISK 11,610 610 million may be requested as a special contribution to the Fund according to
the Act. The Bank issued in 2010 a new declaration of liability to the Fund for a maximum amount of ISK 3,851 million, of which no more than ISK
1,611 million may be requested as a special contribution to the Fund according to the Act. The Bank did not issue a new declaration of liability
between the end of the current reporting period and the date when these consolidated financial statements are authorised for issue. The Group did
not recognise any liability in these consolidated financial statements in respect of the declarations of liability outstanding at year-end 2010 and
2009.
The Government of Iceland is currently working on changing the Act and a bill has been presented for approval by the Icelandic Parliament. Based on
the current draft of this bill, the Bank's management expects its yearly contributions to increase as a result of changes in legal requirements.
Tax on liabilities of financial institutions
On 27 December 2010 the Parliament of Iceland passed a bill (Act no. 155/2010 on special tax on financial institutions) according to which certain
types of financial institutions must pay annually a tax calculated as 0.041% of the carrying amount of their liabilities as determined for tax purposes.
NBI hf. Consolidated Financial Statements 2010 38
All amounts are in ISK million
138 Ársreikningur 2010 Allar upphæðir eru í milljónum króna