4.2
THE GERMANIC ACCOUNTING
4.2.1
Dresdner Bank AB
Dresdner Bank prepared its consolidated financial statements
in accordance with the International Accounting Standards (IASs) of the
International Accounting Standard Committee (IASC). The statements were
prepared under the historic cost convention except for valuation. EU accounting
principles were used within the group to facilitate comparability of statements
prepared by subsidiaries and those of the parent. The parent company's
financial statements were initially prepared in accordance with the Germanic
Commercial Code (Handelsgesetzbuch - HGB) and the German Accounting Directives
for Banks (Rechkredv), which also complied with the provisions of the German
Stock Corporation Act (Aktg).
Presentation of Financial
Statements
Like others, the annual report started with a highlight of the
group's present and future environments, followed by the Directors' report. The
consolidated financial statements began with a presentation of the income
statement, balance sheet, statement of changes in shareholders' equity, and,
finally, a statement of cash flow. Some notes explaining the application of
policies and principles follow the financial statements.
Measurement
Practice
It is the group's policy to report trading assets at market
value. Investment securities were valued at cost. Property and equipment were
recorded at historic purchase or production cost.
Depreciation took the form of straight-line method, with,
building being depreciated over a period of between 25 and 50 years. Office
furniture and equipment were assigned an estimated life span between 4 and 10
years. Any property and equipment taken under operating lease was not reported
in the balance sheet.
Payments made under an operating lease were charged to
administrative expenses using the straight-line method over the period of the
lease.
Goodwill realized on acquisition was capitalized and amortized
on a straight-line basis over a maximum period of 10 years.
Consolidation
Accounting
The consolidated financial statements were made up of results
from the parent and subsidiaries for which the bank owns either more than 50%
of the voting rights or, otherwise, has control over its operation.
The purchase method was used when accounting for acquisitions.
Any investments in associated companies and joint ventures were accounted for
using the equity method.
All foreign currency financial statements for consolidation
are translated using the current rate method (i.e., assets and liabilities were
translated at current exchange rate, while the average exchange rate was used
to translate the income statement). Any translation difference - gain or loss -
was used to adjust the translation reserve and then charged to equity.
4.2.2
Deutsche Bank Ab
Presentation Of Financial Statements
The consolidated financial statement for the parent and the
group has been prepared for the year 2000 including: the consolidated income
statements, the balance sheets; the statement of changes in equity; the cash
flow statement; the notes to the statements; reconciliation statements; and a
risk report.
Measurement
Practice
As for the principles of consolidation, capital consolidation
has been carried out using the book values. Goodwill realized has been
amortized using the straight-line basis. Intra group claims and liabilities,
expenses and profits as well as interim results is eliminated. All dealings
were reported in fair values and changes in fair values are booked to profit
and loss accounts. Shares in related companies, which is not consolidated, were
shown at cost.
Goodwill from corporate acquisitions are amortized largely
over 15 years. If it stems from economically separate business units acquired,
it is amortized on a straight-line basis over five years. Property and
equipment are also accounted for at the cost of acquisition (hence historic
cost). The respective assets are depreciated on a straight-line basis over
their estimated useful lives. In case of declines in values, a write down is
made. Assets and debts denominated in foreign currencies and spot deals not yet
settled are translated at the `spot' mid rate on balance sheet dates. Forward
exchange deals are recorded at a forward rate on balance sheet dates.
Consolidation
Practice
The consolidated financial statements were in accordance with
the International Accounting Standards (IAS) in force on balance sheets dates.
They fulfill both of the conditions of 292 A German commercial code for
exemption from preparation of consolidated financial statements. The
consolidated financial statements applied all existing international accounting
standards in force. Differences between the consolidated financial statements
according to IAS and the German reporting were detailed in the reconciliation
comments. The consolidated financial statements besides that of Deustche Bank
AG (the parent) comprise 117 domestic enterprises, 1061 foreign enterprises, 25
domestic enterprises and 238 foreign enterprises. Two domestic enterprises and
50 foreign enterprises were excluded from the group of consolidated companies.
Capital consolidation was carried out using the book value
method. Goodwill is amortized using the straight-line method.
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