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Geschäftsbericht 2011 englisch

66 notes – münchener Hypothekenbank eg l annual Report 2011 The Münchener Hypothekenbank eG annual financial statement as of December 31, 2011 was prepared in accordance with the provisions of the German Commercial Code (HGB), in conjunc- tion with the accounting regulation for banks and financial service institutions (RechKredV), and in accordance with the rules contained in the Cooperatives Act (GenG) and the Pfand- brief Act (PfandBG). All claims are stated at nominal amounts in accordance with Art. 340e (2) of the German Commercial Code. The difference between the amounts disbursed and the nominal amount is shown under deferred items. All identifiable individual credit risks are covered by specific value adjustments and provi- sions set up against claims for repayment of principal and pay- ment of interest. Contingent risks are covered by general value adjustments. Securities held in the liquidity portfolio are strictly valued at the lower of cost or market principle. The present value corresponds to the current exchange or market price. Securities held as fixed assets, which were mainly acquired as cover for Public Pfandbriefe and for other coverage purposes, are valued at their cost of purchase. Discounts and premiums are recognised as interest income or expense over the terms of the securities. Securities associated with swap agreements are valued together with these agreements, as a single item. To the extent that they are used to hedge risks, derivatives are not valued individually. As was the case in the previous year, securities held as fixed assets during the financial year, and which were not subject to a permanent reduction in value, were valued at the mitigated lower of cost or market principle. Appropriate writedowns in value were taken as of the date of record for those securities held as fixed assets for which a permanent impairment of value must be anticipated. In accordance with the rules pertaining to the valuation of assets, participations and holdings in affiliated companies are valued at their cost of purchase. Depreciation is taken on those assets where the reduction in value is expected to be long-term. Intangible assets and tangible assets are valued at cost or pro- duction costs less accumulated depreciation. Planned depreci- ation was taken in accordance with normal useful lifetimes. Minor value assets were treated in accordance with tax rules. Existing deferred taxes arising due to temporary differences between values calculated for trading and tax purposes are cleared. A backlog of deferred tax assets is not recorded in the balance sheet. Liabilities are shown at their settlement value. Zero bonds are carried in the accounts at the issuing price plus earned inter- est based on the yield at the time of purchase in accordance with the issuing conditions. The difference between the nom- inal amount of liabilities and the amount disbursed is shown under deferred items. Based on the principles of prudent business practice, provisions have been made for uncertain liabilities in the amount of settlement value of these liabili- ties. Provisions with a remaining term of more than one year were discounted using the commensurate average rate of market interest rates. Provisions made for pension obligations are calculated based on the Projected Unit Credit Method, a discount rate of 5.14 percent and a 2.5 percent rate of salary growth, as well as a 2.0 percent rate of pension growth. The calculation is made on the basis of “Guideline tables 2005 G” prepared by Prof. Klaus Heubeck. In accordance with the terms of Art. 253 (2) 2s of the HGB, the average market rate of interest is used for discount purposes with an assumed remaining term to matu- rity of 15 years. Per the terms of Art. 256a of the German Commercial Code, monetary assets and liabilities denoted in foreign currencies are translated at the European Central Bank’s exchange rate valid on the balance sheet date. Income realised from the trans- lation of particularly covered foreign currency positions is carried under net interest income. Costs and income are valued at the individual daily exchange rate. General information on Accounting policies notes 2011

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