Bank of Montreal 2008 Annual Report Download - page 152

(Canadian $ in millions) 2008 2007
Fair value Fair value
Book Fair over (under) Book Fair over (under)
value value book value value value book value
Assets
Cash resources $ 21,105 $ 21,105 $ – $ 22,890 $ 22,890 $ –
Securities 100,138 100,138 – 98,277 98,277 –
Loans
Residential mortgages 49,343 48,982 (361) 52,429 51,710 (719)
Consumer instalment and other personal 43,737 43,304 (433) 33,189 33,120 (69)
Credit cards 2,120 2,120 – 4,493 4,493 –
Businesses and governments 84,151 83,365 (786) 62,650 62,141 (509)
Securities borrowed or purchased under resale agreements 28,033 28,033 – 37,093 37,093 –
207,384 205,804 (1,580) 189,854 188,557 (1,297)
Customers’ liability under acceptances 9,358 9,329 (29) 12,389 12,389 –
Allowance for credit losses (1,747) (1,747) – (1,055) (1,055) –
Total loans and customers’ liability under acceptances,
net of allowance for credit losses 214,995 213,386 (1,609) 201,188 199,891 (1,297)
Derivative instruments 65,586 65,586 – 32,585 32,585 –
Premises and equipment 2,227 2,227 – 1,980 1,980 –
Goodwill 1,635 1,635 – 1,140 1,140 –
Intangible assets 204 204 – 124 124 –
Other assets 10,160 10,160 – 8,340 8,340 –
$ 416,050 $ 414,441 $(1,609) $ 366,524 $ 365,227 $(1,297)
Liabilities
Deposits $ 257,670 $ 257,562 $ (108) $ 232,050 $ 232,202 $ 152
Derivative instruments 60,048 60,048 – 33,584 33,584 –
Acceptances 9,358 9,358 – 12,389 12,389 –
Securities sold but not yet purchased 18,792 18,792 – 25,039 25,039 –
Securities lent or sold under repurchase agreements 32,492 32,492 – 31,263 31,263 –
Other liabilities 14,071 13,938 (133) 12,055 12,023 (32)
Subordinated debt 4,315 4,128 (187) 3,446 3,491 45
Capital trust securities 1,150 1,162 12 1,150 1,198 48
Preferred share liability 250 250 – 250 250 –
Shareholders’ equity 17,904 17,904 – 15,298 15,298 –
$ 416,050 $ 415,634 $ (416) $ 366,524 $ 366,737 $ 213
Total fair value adjustment $(1,193) $(1,510)
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Notes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
148 | BMO Financial Group 191st Annual Report 2008
Note 31: Reconciliation of Canadian and United States Generally Accepted
Accounting Principles
We prepare our consolidated financial statements in accordance with
GAAP in Canada, including interpretations of GAAP by OSFI.
We have included the significant differences that would result if
United States GAAP were applied in the preparation of our Consolidated
Statement of Income, Consolidated Statement of Comprehensive Income,
Consolidated Balance Sheet and Consolidated Statement of Accumulated
Other Comprehensive Loss. We have not included our Consolidated
Statement of Cash Flows as the differences are immaterial.
Deposits
In determining the fair value of our deposits, we incorporate the
following assumptions:
•For fixed rate, fixed maturity deposits, we discount the remaining
contractual cash flows for these deposits, adjusted for expected
redemptions, at market interest rates currently offered for deposits
with similar terms and risks.
•For fixed rate deposits with no defined maturities, we consider fair
value to equal book value based on book value being equivalent to
the amount payable on the reporting date.
•For floating rate deposits, changes in interest rates have minimal
impact on fair value since deposits reprice to market frequently.
On that basis, fair value is assumed to equal book value.
Subordinated Debt, Capital Trust Securities
and Preferred Share Liability
The fair value of our subordinated debt, capital trust securities and
preferred share liability is determined by referring to current market
prices for similar instruments.
Set out in the following table are the amounts that would be reported
if all of our financial instrument assets and liabilities were reported
at their fair values.