Balance Sheet at 31 December 2010 of BBVA
Balance Sheet at 31 December 2010 of BBVA
Balance Sheet at 31 December 2010 of BBVA
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Transl<strong>at</strong>ion <strong>of</strong> financial st<strong>at</strong>ements originally issued in Spanish and prepared in accordance with generally accounting principles Spain<br />
(See Note 1 and 54). In the event <strong>of</strong> a discrepancy, the Spanish-language version prevails.<br />
The changes in fair value after the initial recognition, for reasons other than those included in the preceding<br />
paragraph, are described below according to the c<strong>at</strong>egories <strong>of</strong> financial assets and liabilities:<br />
- “Financial assets held for trading” and “Other financial assets and liabilities design<strong>at</strong>ed <strong>at</strong> fair<br />
value through pr<strong>of</strong>it or loss”<br />
Assets and liabilities recognized under these headings in the accompanying balance sheets are valued<br />
<strong>at</strong> fair value.<br />
Changes arising from the measurement <strong>at</strong> fair value (gains or losses) are recognized <strong>at</strong> their net value<br />
under the heading “Net gains (losses) on financial assets and liabilities” in the accompanying income<br />
st<strong>at</strong>ements (see Note 38). On the other hand, valu<strong>at</strong>ion adjustments by changes in foreign exchange<br />
r<strong>at</strong>es are recognized under the heading "Net exchange differences" in the income st<strong>at</strong>ements.<br />
The fair value <strong>of</strong> the standard financial deriv<strong>at</strong>ives included in the held for trading portfolios is equal to<br />
their daily listed price in an active market. If, under exceptional circumstances, their listed price cannot<br />
be established on a given d<strong>at</strong>e, these deriv<strong>at</strong>ives are measured using methods similar to those used to<br />
value over-the-counter (“OTC”) deriv<strong>at</strong>ives.<br />
The fair value <strong>of</strong> OTC deriv<strong>at</strong>ives ("present value" or "theoretical price") is equal to the sum <strong>of</strong> future<br />
cash flows arising from the instrument, discounted <strong>at</strong> the measurement d<strong>at</strong>e; these deriv<strong>at</strong>ives are<br />
valued using methods recognized by the financial markets: the net present value (NPV) method, option<br />
price calcul<strong>at</strong>ion models, etc. (see Note 6).<br />
- “Available-for-sale financial assets”<br />
Assets and liabilities recognized under this heading in the accompanying balance sheets are measured<br />
<strong>at</strong> fair value.<br />
Changes arising from the measurement <strong>at</strong> fair value (gains or losses) are recognized temporarily, <strong>at</strong> the<br />
net amount, under the heading “Valu<strong>at</strong>ion adjustments - Available-for-sale financial assets” in the<br />
accompanying balance sheets.<br />
Valu<strong>at</strong>ion adjustments arising from non-monetary items by changes in foreign exchange r<strong>at</strong>es are<br />
recognized temporarily under the heading “Valu<strong>at</strong>ion adjustments - Exchange differences” in the<br />
accompanying balance sheets. Valu<strong>at</strong>ion adjustments arising from monetary items by changes in foreign<br />
exchange r<strong>at</strong>es are recognized under the heading “Net exchange differences” in the income st<strong>at</strong>ements.<br />
The amounts recognized in the headings “Valu<strong>at</strong>ion adjustments - Available-for-sale financial assets”<br />
and “Valu<strong>at</strong>ion adjustments - Exchange differences” remain in the equity until the asset is derecognized<br />
from the balance sheet or until the existence <strong>of</strong> an impairment loss is determined, <strong>at</strong> which time those<br />
amounts are recognized under the headings “Gains or losses on financial assets and liabilities” (Note 38)<br />
or “Net exchange differences” in the income st<strong>at</strong>ement.<br />
The net impairment losses in the available-for-sale financial assets during the period are recognized<br />
under the heading “Impairment losses on financial assets (net) – Other financial instruments not <strong>at</strong> fair<br />
value through pr<strong>of</strong>it or loss” in the income st<strong>at</strong>ements (Note 43).<br />
The gains from sales <strong>of</strong> other equity instruments considered str<strong>at</strong>egic investments registered under<br />
“Available-for-sale Financial Assets” are recognized under the heading “Gains (losses) in non-current<br />
assets held-for-sale not classified as discontinued oper<strong>at</strong>ions” in the income st<strong>at</strong>ement, even though<br />
they had not been classified in a previous balance sheet as non-current assets held for sale, as indic<strong>at</strong>ed<br />
in Rule 56 <strong>of</strong> Circular 4/2004 and subsequent amendments (Note 46).<br />
- “Loans and receivables”, “Held-to-m<strong>at</strong>urity investments” and “Financial liabilities <strong>at</strong> amortized<br />
cost”<br />
Assets and liabilities recognized under these headings in the accompanying balance sheets are<br />
measured <strong>at</strong> “amortized cost” using the “effective interest r<strong>at</strong>e” method, as the Bank has the intention to<br />
hold such financial instruments to m<strong>at</strong>urity.<br />
Net impairment losses <strong>of</strong> assets under these headings arising in a particular year are recognized under<br />
the heading “Impairment losses on financial assets (net) – Loans and receivables” or “Impairment losses<br />
on financial assets (net) – Other financial instruments not valued <strong>at</strong> fair value through pr<strong>of</strong>it or loss” in the<br />
income st<strong>at</strong>ement for th<strong>at</strong> year (Note 43).<br />
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