Matriz de Identificación y caracterización de impactos

The consolidated accounts comprise the bank and all its subsi- diaries that are not planned to be sold in the near future, which are therefore to be classified as held for sale in accordance with IFRS 5. Subsidiaries are defined as companies in which the bank has a controlling interest, i.e. the power to govern the company’s

ANNUAL REPORT - NOTES

financial and operational policies for the purpose of gaining benefits from the company’s activities. Subsidiaries are con- solidated from the date the bank gains a controlling interest, and they will be eliminated from the consolidation on the date when such control is relinquished.

As at 31.12.14 following subsidiaries are consolidated:

SpareBank 1 Finans Nord-Norge AS (100%), SpareBank 1 Nord- Norge Portefølje AS (100%), SpareBank 1 Nord-Norge Forvalt- ning ASA 100%, EiendomsMegler 1 Nord-Norge AS (100%), SpareBank 1 Regnskapshuset Nord-Norge AS (100%), Nort- hWest 1 Alliance Bank (75%), EiendomsMegler 1 Lofoten AS (60%), Nord-Norge Eiendom IV AS (100%), Alsgården AS (100%), and Fredrik Langes gate 20 AS. (100%)

On achieving a controlling interest in a company (business com- binations), all identifiable assets and liabilities will be recognised at fair value in accordance with IFRS 3. Any positive differences between the cost of acquisition and fair value of identifiable assets and liabilities are recognised as goodwill, whereas any negative differences are recognised as income.

The accounting of goodwill after the initial recognition is commented on under the section on intangible assets. In the parent bank’s accounts, equity stakes in group companies are recognised at cost price in accordance with IFRS. The transition to IFRS in the parent bank’s accounts entails the use of different principles for the incorporation of subsidiaries, joint venture bu- sinesses and associated companies into the two accounts. In the IFRS-based group accounts, the equity method of acco- unting is applied, which entails that profit/loss attributable to joint ventures and associated companies is included in the group’s profit and loss account by the equity stake, and they are taken into account in the book value of the assets in the balance sheet. Profit/loss attributable to subsidiaries are consolidated into the accounts. In accordance with IFRS, only the cost met- hod shall be used in the company accounts. This means that the book value of subsidiaries in the parent bank’s balance sheet represents historical cost. The book values are tested for impai- rment. Only the annual dividends received and any write-down on the value of the shares are stated in the parent bank’s profit and loss account. Intra-group transactions, open accounts and unrealised profit between group companies have been elimi- nated. The minority interest’s share of the group’s profit/loss is presented on a separate line in the profit and loss account. Un- der equity capital, the minority interest’s share is also presented on a separate line.

Book values are tested for falls in value and possible impairment.

Associated companiesp

An associated company is defined as a company in which the bank has significant influence, but not a controlling interest. An influence is normally significant when the ownership interest is between 20% and 50%. Associated companies are included in the group accounts according to the equity method of acco- unting. The investment is recognised initially at historical cost in the balance sheet and subsequently adjusted for changes in the bank’s share of the net assets of the associated company. The bank’s share of the associated company’s profit/loss is in- corporated in the group accounts, whereas the equity stake is recognised according to the cost method in the parent bank’s accounts, in the same manner as for group companies, as men- tioned above.

As at 31.12.14 the following associated companies are applied with equity method of accounting: SpareBank 1 Boligkreditt AS (14,71 %), SpareBank 1 Næringskreditt AS (20,83 %), BN Bank AS (23,5 %), SpareBank 1 Kredittkort AS (19,83 %), and SpareBank 1 Markets AS (27,02 %).

Joint ventures

A joint venture may comprise jointly controlled operations, assets and/or companies. Joint control implies that the bank exercises control jointly with other parties, as governed by an agreement. Jointly controlled operations and assets are recog- nised in the bank’s group accounts as the bank’s proportional share of the assets, liabilities and other balance sheet items. Joint ventures are recognised in the group accounts accor- ding to the equity method of accounting. In the parent bank’s accounts, the cost method of accounting is used, as mentioned above.

As at 31.12.14 the following joint ventures are applied with equity method of accounting: SpareBank 1 Gruppen AS (19,5 %), SpareBank 1 Banksamarbeidet DA (17,74 %),

In the parent bank’s accounts, equity stakes in joint ventures recognised at cost price in accordance with IFRS.

CLASSIFICATION

Financial asset or liabilities

Criteria that allows a financial asset or liability to follow the rules for fair value through profit and loss

Held for sale Stated at fair value for

first time Hold to maturity Loans and receivables Available for sale Assets

Cash and deposits with central banks Yes x

Lending to financial institutions Yes x

Lending to customers Yes x x

Shares Yes x x x

Certificates and bonds Yes x x x

Financial derivatives Yes x

Property - Own buildings No

Plant and equipment No

Intangible assets No

Other assets No

Liabilities

Liabilities to financial institutions Yes Deposits from customers Yes Securities issued/finding Yes

Financial derivatives Yes x

Other liabilites No

Hybrid Tier 1 capital Yes Subordinated loan capital Yes

Operations hold for sale

The Group classifies operations as held for sale under IFRS 5 once the executive management group has approved a plan for their disposal. Subsidiaries that are acquired with a view to selling them on, including companies that are taken over as part of restructuring loans if the Group expects to dispose of the company within a reasonable amount of time.

Classification and valuation of balance sheet items

Financial instruments are classified as being in one of the fol- lowing categories:

• at fair value through profit or loss • available for sale (AFS)

• loans and receivables • investments held to maturity

• financial instruments at amortised cost