ING Direct 2008 Annual Report Download - page 108

2.1 Consolidated annual accounts
The statement of cash flows has been drawn up in accordance with the indirect method, classifying cash flows as cash flows from
operating, investing and financing activities. In the net cash flow from operating activities, the result before tax is adjusted for those
items in the profit and loss account, and changes in balance sheet items, which do not result in actual cash flows during the year.
For the purposes of the statement of cash flows, Cash and cash equivalents comprise balances with less than three months’ maturity
from the date of acquisition, including cash and non-restricted balances with central banks, treasury bills and other eligible bills, amounts
due from other banks and amounts due to banks. Investments qualify as a cash equivalent if they are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Cash flows arising from foreign currency transactions are translated into the functional currency using the exchange rates at the date
of the cash flows.
The net cash flow shown in respect of Loans and advances to customers relates only to transactions involving actual payments or
receipts. The Addition to loan loss provision which is deducted from the item Loans and advances to customers in the balance sheet
has been adjusted accordingly from the result before tax and is shown separately in the statement of cash flows.
The difference between the net cash flow in accordance with the statement of cash flows and the change in Cash and cash equivalents
in the balance sheet is due to exchange rate differences and is accounted for separately as part of the reconciliation of the net cash flow
and the balance sheet change in Cash and cash equivalents.
Accounting policies for the consolidated statement
of cash flows of ING Group
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