Annual report 2004 (PDF, 4141 kB) - Unicredit Bank

Property, plant and equipment and intangible assets are periodically reviewed for impairment.
Where the carrying amount of an asset is greater than its estimated recoverable amount,
it is written down immediately to its recoverable amount. Gains and losses on disposal
of property, plant and equipment and intangible assets are determined by reference to their net
book value and are taken into account in determining operating profit. Repairs and renewals are
charged to the income statement when the expenditure is incurred, value enhancements are
capitalised.
(m)
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise balances
with less than 90 days maturity from the date of acquisition including: cash and balances
with central bank excluding mandatory reserve deposits, treasury bills, amounts due from other
banks and trading securities except equities.
(n)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable estimate of the net present value
of the obligation can be made.
(o)
Employee benefits
During the year the Bank provides its employees with contributory pension insurance based
on a defined contributory pension plan. These pension insurance contributions are accounted
for directly into costs. In addition, in order to finance a state pension system, the Bank makes
regular payments into the national pension plan.
(p)
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. The rates enacted at the balance sheet date are used to determine
deferred income tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
(q)
Leases
For operating leases, lease payments are recognised as an expense in the income statement
over the lease term. The Group did not enter into any (material) finance lease contracts.
(r)
Acceptances
Acceptances comprise undertakings by the Group to pay bills of exchange drawn
on customers. The Group expects most acceptances to be settled simultaneously with
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