4.1.2
Skandinaviska Enskilda Banken (S.E.B.)
As with FöreningsSparbanken's Annual Report of 2000,
SEB's report was prepared in accordance with the Annual Accounts Act for Credit
Institution and Securities Companies, the regulations and general advice of the
Swedish Financial Supervisory Authority, and the recommendations of the Swedish
Financial Accounting Standard Council.
Presentation of Financial
Statements
The annual report of SEB started with a briefing on the bank's
present and future economic environment and also contained the board of
directors' report; a presentation of the firm's Operational Profit and Loss
accounts (which was separated from the Statutory Profit and Loss Accounts) the
presentation of the Balance Sheets; followed by a Cash Flow analysis. It is
worth noting that the manner of reporting Operating Profit and Loss Accounts
separately from Statutory Profit and Loss Accounts does not occur in the
financial statements of FöreningsSparbanken, which only published the
Operating profit.
Measurement
Practice
Acquisition or historic cost was the method used in valuing
financial fixed assets at SEB. The bank used the `lower of cost or market'
method to value current assets, with transferable derivatives instruments and
securities in the trading portfolio, as current assets may be valued at market.
This is different from FöreningsSparbanken who valued it at fair value.
Interest bearing securities were accounted for using accrual
accounting over the life of the instrument. Depreciation of tangible fixed
assets was on a straight-line basis, except for equipment leased to clients,
which was normally reported at acquisition value but depreciated on an annuity
basis. Accrual accounting was used to account for financial cost of the
financial liabilities.
Consolidation
Accounting
SEB group includes SEB and each of those companies in which
the bank directly or indirectly holds more than 50% of the voting power of the
shares.
Company acquisition was accounted for using the purchase
method. In acquisitions, goodwill was amortized over its estimated economic
useful life, not exceeding 20 years.
The current rate method was used to translate foreign currency
financial statements into Swedish kroner (the reporting currency). Any
translation difference was recorded in the consolidated profit and loss
account.
It is worth noting that both FöreningsSparbanken and
Skandinaviska Enskilda Banken (SEB) have only adapted to the recommendations of
Financial Supervisory Authority during 2000. For comparism, figures for 1999
and 1998 have been recalculated using these recommendations. One of the reasons
behind this uniformity may be because of the merger plans of both companies
announced at the end of 2000.
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