CA Indosuez (Switzerland) SA - 2018 Annual Report

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CA Indosuez (Switzerland) SA

Property, plant and equipment Property, plant and equipment are recognised at their acquisition cost and depreciated on a straight-line basis over their estimated useful life under line item “Value adjustments to equity investments, impairment losses on fixed and intangible assets”. The estimated useful lives are as follows: - tablets and mobile phones 3 years - vehicles and IT equipment 5 years - furniture, fixtures and technical resources 5 years - mainframe IT system 5 years - fitting-out of office space 10 years - self-developed software 10 years - buildings used by the Bank (1.5% per annum) 66.5 years On each balance sheet date, the Bank determines whether the value of property, plant and equipment has been impaired. This assessment is based on indications suggesting that an impairment loss may have occurred. Where evidence of impairment exists, the Bank calculates a recoverable amount for each individual asset. The value of an asset is impaired when its carrying amount exceeds its recoverable amount. If the asset is impaired, the book value is written down to the recoverable value and the impairment is charged to the item “Value adjustments on participating interests, and depreciation and amortisation of fixed and intangible assets”. If the impairment test shows that the operating life of an intangible asset has changed, the Bank amortises the residual carrying amount over the newly estimated useful lifetime. Realised gains and losses from the sale of fixed assets are recorded respectively under “Extraordinary income” and “Extraordinary expenses”. For the acquisition of business activities and companies, assets and liabilities are assessed at their current value. When this assessment reveals that the acquisition price exceeds net assets, the difference is deemed to be goodwill and recorded as an intangible asset. The opposite situation involves negative goodwill. Residual negative goodwill, such as when a firm is acquired at a “bargain price”, must immediately be recognised under “Extraordinary income”. Goodwill is capitalised and written down over its estimated useful life. The Bank estimates the goodwill's useful life to be five years. Provisions Legal and factual obligations are valued regularly. If an outflow of resources is likely and can be reliably estimated, a corresponding provision is created. Existing provisions are reassessed at each balance sheet date. Based on this reassessment, the provisions are increased, left unchanged or released. Intangible assets Goodwill

of the value adjustments is recorded under “Other ordinary expenses” or “Other ordinary income”.

Held-to-maturity debt securities are valued according to the accrual method. The corresponding premiums and discounts are apportioned over the residual period to maturity under “Accrued income and prepaid expenses” or “Accrued expenses and deferred income”. If held-to-maturity financial investments are sold or reimbursed early, the realised gains and losses, which correspond to the interest component, are accrued/ deferred over the residual term to maturity of the transaction under “Other assets” or “Other liabilities”. Equity investments and stocks of precious metals held in physical form and for the Bank’s proprietary interests Equity securities are valued at the lower of the acquisition cost and market value. Physical inventories of precious metals, intended to hedge liabilities in the metals account, are measured at fair value. Value adjustments are recorded under “Other ordinary expenses” or “Other ordinary income”. Participating interests Participating interests held by the Bank include equity securities of companies that are held for long-term investment purposes, irrespective of any voting rights.

These interests are valued individually at their acquisition cost, less any value adjustments.

The Bank checks participating interests for impairment at every reporting date.

Realised gains and losses from the sale of participating interests are respectively recorded under “Extraordinary income” and “Extraordinary expenses”.