UBI Banca Group

million were recognised through profit or loss in 2011, of which €15.9 million had already
been recognised as at 30 th June 2011.
Impairment losses of euro €15.3 million were also recognised during the year on non
significant share holdings and also on units held in OICRs (collective investment instruments).
Realignment of values for tax purposes relating to goodwill and other intangible assets
Paragraphs 12 to 15 of article 23 of Decree Law No. 98 of 6 th July 2011, converted into Law
No. 111 of 15 th July 2011, containing measures for financial stabilisation, allows values for
statutory accounting and for tax purposes relating to goodwill and other intangible assets to
be realigned. More specifically the legislation in question allows, in accordance with the
principles of Law No. 2 of 28 th January 2009, the recognition for tax purposes of higher values
attributed to controlling interests acquired through extraordinary transactions, consisting of
the value of goodwill, business brands and other intangible assets recognised autonomously in
the consolidated financial statements.
That realignment is performed by the payment of a substitute tax of 16% and it allows the
amount in question to be deducted (but not in the statutory accounts) for corporate income
tax (IRES) and local production tax (IRAP) purposes at constant rates over ten years.
With specific regard to the tax relief on the amounts relating to prior year extraordinary
transactions, and that is those performed before the law in question entered into force, a oneoff
substitute tax could be paid by 30 th November 2011, while the deduction of the
amortisation (for tax purposes only) runs from 2013.
As already reported in the interim financial report as at and for the period ended 30 th June
2011, in view of the above, UBI Banca decided to take advantage of the option in question with
regard to the following:
• goodwill recognised in the consolidated financial statements as at 31 st December 2010,
arising from:
- the purchase price allocation performed following the merger between the former
BPU Banca Group and the former Banca Lombarda e Piemontese Group, net of the
€569 million already subject to tax relief in 2009 – consisting of goodwill
recognised in the separate balance sheet of UBI Banca – for a total amount subject
to tax relief of €2,361.7 million;
- the acquisition of IW Bank, with an amount subject to tax relief of €54.6 million;
• other intangible assets, recognised in the consolidated balance sheet as at 31 st
December 2010, arising from the purchase price allocation following the merger
between the former BPU Group and the former Banca Lombarda e Piemontese Group.
In detail, these intangible assets consist of the following:
- core deposits, with an amount subject to tax relief of €312 million;
- assets under management, with an amount subject to tax relief of €165 million;
- assets under custody, with an amount subject to tax relief of €54 million;
- brands, with an amount subject to tax relief of €338 million.
Reference was made with regard to the accounting treatment, as occurred in 2008, to the
Italian Accountants Association (Organismo Italiano di Contabilità) document, “Application No.
1 - Hypothesis for the accounting treatment for the substitute tax for tax relief on goodwill
pursuant to paragraph 10, Art. 15 of Decree Law No. 185 of 29 th November 2008”. This
document allows the simultaneous recognition of the substitute tax and the relative deferred
tax assets in the income statement.
Following the resolution, passed by the Management Board on 25 th August 2011 and
confirmed by the Supervisory Board on 29 th August 2011, to take advantage of the options
provided by the legislation in question, as at 30 th June 2011 the amount relating to the
substitute tax (16%) was charged to the income statement and deferred tax assets based on
the nominal corporate income tax rate (27.5%) were recognised 2 .
With regard to deferred local production tax (IRAP) assets, the decision to take advantage of
the tax relief resulted in a decrease in the tax base of UBI Banca of €328,526 thousand, with a
2 In this regard, in compliance with IAS 12 tax assets are recognised on the assumption that it is probable that
sufficient taxable profit will be available against which the deductible temporary difference can be utilised.
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