UOB Annual Report 2002 - United Overseas Bank
UOB Annual Report 2002 - United Overseas Bank
UOB Annual Report 2002 - United Overseas Bank
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(k)<br />
Derivative Financial Instruments<br />
Derivative financial instruments are initially recognised in the balance sheets at amounts paid or received, as appropriate.<br />
Those undertaken for trading purposes are subsequently remeasured to fair value and the resultant profits and losses are taken<br />
up in the income statements.<br />
Those entered into for hedging purposes are subsequently accounted for in a manner consistent with the accounting treatment<br />
of the hedged items.<br />
(l)<br />
Goodwill<br />
Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable net assets of<br />
subsidiaries, associates or businesses acquired.<br />
Goodwill arising on acquisition of subsidiaries occurring on or after 1 January 2001 is reported in the balance sheet as an<br />
intangible asset. Goodwill on acquisition of associates occurring on or after 1 January 2001 is included in investments in<br />
associates.<br />
Goodwill is amortised on a straight-line basis, through the income statement, over its useful economic life up to a maximum of<br />
20 years. Goodwill which is assessed as having no continuing economic value is written off to the income statement.<br />
Negative goodwill represents the excess of the fair value of the identifiable net assets of subsidiaries or businesses acquired over<br />
the fair value of the consideration given. Negative goodwill is amortised on a straight-line basis, through the income statement<br />
over the remaining weighted average useful life of the identifiable depreciable/amortisable assets acquired, with the exception<br />
of the amount of negative goodwill exceeding the fair values of acquired identifiable non-monetary assets which is recognised<br />
as income immediately.<br />
(m) Provisions<br />
Provisions are recognised when the Group or the <strong>Bank</strong> has a present legal or constructive obligation as a result of past events, it<br />
is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be<br />
made.<br />
(n)<br />
Employee Benefits<br />
Equity Compensation Benefits<br />
Employees of the Group and the <strong>Bank</strong> with the corporate grade of Vice President (or equivalent position) and above as well as<br />
selected employees below Vice President qualify for the <strong>UOB</strong> Executives’ Share Option Scheme and the <strong>UOB</strong> 1999 Share Option<br />
Scheme, subject to certain restrictions.<br />
Pursuant to these Schemes, options have been awarded to enable the holders to acquire shares in the <strong>Bank</strong> at the exercise price.<br />
The Group and the <strong>Bank</strong> do not recognise share options issued under these Schemes as a charge to the income statements.<br />
Post Employment Benefits<br />
The Group contributes to legally required social security schemes and these schemes are considered defined contribution schemes.<br />
These expenses are charged to the income statements as and when they arise and are included as part of staff costs.<br />
(o)<br />
Dividends<br />
Dividends on ordinary shares are recognised in equity in the period in which they are declared.<br />
UNITED OVERSEAS BANK 103