ING Direct 2009 Annual Report Download - page 101

Impairments on other debt instruments (Loans and held-to-maturity investments) are part of the loan loss provision as described above.
Impairment reviews with respect to goodwill and intangible assets are performed at least annually and more frequently if events indicate
that impairment may have occurred. Goodwill is tested for impairment by comparing the book value (including goodwill) to the best
estimate of the fair value less cost to sell of the reporting unit to which the goodwill has been allocated. A reporting unit is the lowest level
at which goodwill is monitored. Intangible assets are tested for impairment by comparing its book value with the best estimate of its
recoverable amount.
The identification of impairment is an inherently uncertain process involving various assumptions and factors, including financial condition
of the counterparty, expected future cash flows, statistical loss data, discount rates, observable market prices, etc. Estimates and
assumptions are based on management’s judgement and other information available prior to the issuance of the financial statements.
Materially different results can occur as circumstances change and additional information becomes known.
EMPLOYEE BENEFITS
Group companies operate various defined benefit retirement plans covering a significant number of ING’s employees.
The liability recognised in the balance sheet in respect of the defined benefit pension plans is the present value of the defined benefit
obligation at the balance sheet date less the fair value of the plan assets, together with adjustments for unrecognised actuarial gains and
losses, and unrecognised past service costs.
The determination of the defined benefit plan liability is based on internal and external actuarial models and calculations. The defined
benefit obligation is calculated using the projected unit credit method. Inherent in these actuarial models are assumptions including
discount rates, rates of increase in future salary and benefit levels, mortality rates, trend rates in health care costs, consumer price index,
and the expected return on plan assets. The assumptions are based on available market data and the historical performance of plan assets,
and are updated annually.
The actuarial assumptions may differ significantly from the actual results due to changes in market conditions, economic and mortality
trends, and other assumptions. Any changes in these assumptions could have a significant impact on the defined benefit plan liabilities
and future pension costs. The effects of changes in actuarial assumptions and experience adjustments are not recognised in the profit
and loss account unless the accumulated changes exceed 10% of the greater of the defined benefit obligation and the fair value of the
plan assets. If such is the case the excess is then amortised over the employees’ expected average remaining working lives. Reference is
made to Note 21 ‘Other liabilities’ for the weighted averages of basic actuarial assumptions in connection with pension and other post-
employment benefits.
PRINCIPLES OF VALUATION AND DETERMINATION OF RESULTS
CONSOLIDATION
ING Group (‘the Group’) comprises ING Groep N.V. (‘the Company’), ING Verzekeringen N.V., ING Bank N.V. and all other subsidiaries. The
consolidated financial statements of ING Group comprise the accounts of ING Groep N.V. and all entities in which it either owns, directly
or indirectly, more than half of the voting power or over which it has control of their operating and financial policies through situations
including, but not limited to:
Ability to appoint or remove the majority of the board of directors;•
Power to govern such policies under statute or agreement; and•
Power over more than half of the voting rights through an agreement with other investors.•
A list of principal subsidiaries is included in Note 29 ‘Principal subsidiaries’.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered in assessing whether the
Group controls another entity. For interests in investment vehicles the existence of control is determined taking into account both ING
Group’s financial interests for own risk and its role as investment manager.
The results of the operations and the net assets of subsidiaries are included in the profit and loss account and the balance sheet from the
date control is obtained until the date control is lost. On disposal, the difference between the sales proceeds, net of directly attributable
transaction costs, and the net assets is included in net result.
A subsidiary which ING Group has agreed to sell but is still legally owned by ING Group may still be controlled by ING Group at the
balance sheet date and, therefore, still be included in the consolidation. Such a subsidiary may be presented as a held for sale disposal
group if certain conditions are met. Disposal groups (and Non-current assets) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is
highly probable and the disposal group (or asset) is available for immediate sale in its present condition; management must be committed
to the sale, which should be expected to occur within one year from the date of classification as held for sale.
All intercompany transactions, balances and unrealised surpluses and deficits on transactions between group companies have been
eliminated. Where necessary, the accounting policies used by subsidiaries have been changed to ensure consistency with group policies. In
general, the reporting dates of subsidiaries are the same as the reporting date of ING Groep N.V.
2.1 Consolidated annual accounts
ING Group Annual Report 2009 99
Accounting policies for the consolidated balance sheet and profit and loss account of ING Group (continued)