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ePaper created 2014-04-15, 13:56:41 | version 1.30.00
58 General information on accounting policies Notes 2013 notes – münchener Hypothekenbank eg l annual Report 2013 The Münchener Hypothekenbank eG annual financial statement as of December 31, 2013 was prepared in accordance with the provisions of the German Commercial Code (HGB), in conjunction with the accounting regulation for banks and financial service institutions (RechKredV), and in accordance with the rules con- tained in the Cooperatives Act (GenG) and the Pfandbrief 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 provisions set up against claims for repayment of principal and payment of interest. Contingent risks are covered by general value adjust- ments. In addition, contingency reserves were formed pursuant to Art. 340f of the German Commercial Code. 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 residual life of the securities. Securities associated with swap agreements are valued together with these agreements as a single item. To the extent that derivatives are used to hedge risks they are not val- ued individually. Unscheduled depreciation taken in accordance with Art. 253 (3) 3s of the German Commercial Code was not taken for market price related changes in the value of securities because we do not anticipate that the reduction in value will be permanent. 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 deprecia- tion 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 be- tween 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 interest based on the yield at the time of purchase in accordance with the issuing conditions. The difference between the nominal amount of liabilities and the amount disbursed is shown under deferred items. Based on the principles of prudent business prac- tice, provisions have been made for uncertain liabilities in the amount of settlement value of these liabilities. Provisions with a remaining term of more than one year were discounted using the commensurate average rate of market interest rates. Provi- sions made for pension obligations are calculated based on the Projected Unit Credit Method, a discount rate of 4.89 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 German Com- mercial Code, the average market rate of interest is used for dis- count purposes with an assumed remaining term to maturity 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 car- ried under net interest income. Costs and income are valued at the individual daily exchange rate.