ING Direct 2013 Annual Report Download - page 100

Notes to the consolidated annual accounts
of ING Group
amounts inmillions of euros, unless stated otherwise
NOTES TO THE ACCOUNTING POLICIES
AUTHORISATION OF ANNUAL ACCOUNTS
The consolidated annual accounts of ING Groep N.V. for the year ended 31 December 2013 were authorised for issue in accordance with a
resolution of the Executive Board on 17 March 2014. The Executive Board may decide to amend the annual accounts as long as these are
not adopted by the General Meeting of Shareholders. The General Meeting of Shareholders may decide not to adopt the annual accounts,
but may not amend these. ING Groep N.V. is incorporated and domiciled in Amsterdam, the Netherlands. The principal activities of ING
Group are described in the section ‘ING at a glance’ in section 1.
1 ACCOUNTING POLICIES
ING Group applies International Financial Reporting Standards as adopted by the European Union ‘IFRS-EU’. In the annual accounts the
term ‘IFRS-EU’ is used to refer to International Financial Reporting Standards as adopted by the EU, including the decisions ING Group
made with regard to the options available under IFRS-EU.
IFRS-EU provides several options in accounting policies. The key areas in which IFRS-EU allows accounting policy choices, and the related
ING accounting policy, are summarised as follows:
• As explained in the section ‘Principles of valuation and determination of results’ and in Note 47 ‘Derivatives and hedge accounting’ ING
Group applies fair value hedge accounting to portfolio hedges of interest rate risk (macro hedging) under the EU ‘carve out’ of IFRS-EU;
• Under IFRS 4, an insurer may continue its existing pre-IFRS accounting policies for insurance contracts, provided that certain minimum
requirements are met. Upon adoption of IFRS in 2005, ING Group decided to continue the then existing accounting principles for
insurance contracts under IFRS. ING Group operates in many different countries and the accounting principles for insurance contracts
follow local practice in these countries. ING’s businesses in the Netherlands apply accounting standards generally accepted in the
Netherlands (Dutch GAAP) for its provisions for liabilities under insurance contracts; similarly, ING’s businesses in the United States apply
accounting standards generally accepted in the United States (US GAAP);
• ING’s accounting policy for Real estate investments is fair value, with changes in fair value reflected immediately in the profit and loss
account;
• ING’s accounting policy for Property for own use is fair value, with changes in fair value reflected in the revaluation reserve in equity
(‘Other comprehensive income’). A net negative revaluation on individual properties is reflected immediately in the profit and loss
account; and
• ING’s accounting policy for joint ventures is proportionate consolidation.
ING Group’s accounting policies under IFRS-EU and its decision on the options available are included in the section ‘Principles of valuation
and determination of results’ below. Except for the options included above, the principles in section ‘Principles of valuation and
determination of results’ are IFRS-EU and do not include other significant accounting policy choices made by ING. The accounting policies
that are most significant to ING are included in section ‘Critical accounting policies’.
CHANGES IN ACCOUNTING POLICIES IN 2013
The following new and/or amended IFRS-EU standards were implemented by ING Group in 2013:
• Amendments to IAS 19 ‘Employee Benefits’;
• Amendments to IAS 1 ‘Presentation of Financial Statements’;
• Amendments to IFRS 7 ‘Financial instruments: Disclosures’; and
• IFRS 13 ‘Fair Value Measurement’.
Amendments to IAS 19 ‘Employee Benefits’
The most significant change of the revised IAS 19 ‘Employee Benefits’ relates to the accounting for defined benefit pension obligations
and the corresponding plan assets. The amendments require immediate recognition in Other comprehensive income (i.e. in equity) of
changes in the defined benefit obligation and in the fair value of plan assets due to actuarial gains and losses. The deferral of actuarial
gains and losses through the ‘corridor approach’, which was applied under the previous version of IAS 19 until the end of 2012, is no
longer allowed. As a related consequence, deferred actuarial gains and losses are no longer released to the profit and loss account upon
curtailment. Furthermore, the amendments require the return on plan assets for the purpose of calculating the pension expense to be
determined using a high-quality corporate bond rate, equal to the discount rate of the defined benefit obligation; until 2012
management’s best estimate was applied. The amendments also introduce a number of other changes and extended disclosure
requirements. The implementation of the amendments to IAS 19 resulted in the recognition of accumulated actuarial gains and losses in
equity as at 1 January 2013; more information is provided in Note 44 ‘Pension and other post-employment benefits’. As a result,
Shareholders’ equity decreased with EUR 2.6 billion after tax (EUR 3.5 billion before tax) on 1 January 2013. The recognition of actuarial
gains and losses in equity will create volatility in equity going forward. The changes in IAS 19 are implemented retrospectively; as a result,
comparative figures for previous years have been restated and are presented as if the new requirements were always applied.
98 ING Group Annual Report 2013