TD Bank 2011 Annual Report Download - page 122

TD BANK GROUP ANNUAL REPORT 2011 FINANCIAL RESULTS120
OTHER INTANGIBLES
The Bank’s other intangible assets consist primarily of core deposit
intangibles, computer software, and customer relationships. Other
intangible assets are amortized over their estimated useful life (3 to
20 years) on a straight-line basis for software and proportionate to
the expected economic benefit for the remaining other intangible
assets. Future amortization expense for the carrying amount of other
intangible assets is estimated to be as follows for the next five years:
2012 – $425 million; 2013 – $387 million; 2014 – $328 million;
2015 – $254 million; and 2016 – $199 million.
All other intangible assets are assessed for impairment when an event
or change in circumstances indicates that the assets might be impaired.
No significant impairment write-downs were required for the years
ended October 31, 2011, 2010, and 2009.
The following table presents details of the Bank’s other intangible
assets as at October 31:
Other Intangibles
(millions of Canadian dollars) 2011 2010
Carrying Accumulated Net carrying Net carrying
value amortization value value
Core deposit intangible assets $ 5,298 $ (4,063) $ 1,235 $ 1,614
Other intangible assets 5,938 (5,105) 833 479
Total $ 11,236 $ (9,168) $ 2,068 $ 2,093
LAND, BUILDINGS, EQUIPMENT, AND OTHER DEPRECIABLE ASSETS
NOTE 10
Buildings, computer equipment, furniture and fixtures, other equipment,
and leasehold improvements are recognized at cost less accumulated
depreciation and provisions for impairment, if any. Land is recognized
at cost. Gains and losses on disposal are included in non-interest
income in the Consolidated Statement of Income.
Properties or other assets leased under a capital lease are capitalized
and depreciated on a straight-line basis over the lease term or estimated
useful life of the asset.
The Bank records the obligation associated with the retirement of a
long-lived asset at fair value in the period in which it is incurred and can
be reasonably estimated, and records a corresponding increase to the
carrying amount of the asset. The asset is depreciated on a straight- line
basis over its remaining useful life while the liability is accreted to reflect
the passage of time until the eventual settlement of the obligation.
Depreciation is recognized on a straight-line basis over the useful
lives of the assets estimated by asset category, as follows:
Assets Useful life
Buildings 15 to 40 years
Computer equipment 3 to 7 years
Furniture and fixtures 3 to 15 years
Other equipment 5 to 8 years
Leasehold improvements Lesser of lease term plus one renewal or 15 years
Net Book Value
(millions of Canadian dollars) 2011 2010
Accumulated Net book Net book
Cost depreciation value value
Land $ 834 $ – $ 834 $ 830
Buildings 2,179 678 1,501 1,367
Computer equipment 608 250 358 680
Furniture, fixtures and other equipment 1,461 750 711 674
Leasehold improvements 1,174 494 680 696
Total $ 6,256 $ 2,172 $ 4,084 $ 4,247
Accumulated depreciation at the end of 2010 was $2,285 million.
Depreciation expense amounted to $467 million for 2011 (2010 –
$601 million; 2009 – $600 million).
Depreciable assets are assessed for impairment when an event or
change in circumstance indicates that the asset might be impaired.
Impairment is considered to have occurred if the projected undiscounted
cash flows resulting from the use and eventual disposition of an asset
is less than its carrying value, at which point the asset would be written
down to its net recoverable amount. An impairment loss is recognized
in the Consolidated Statement of Income in the period in which the
impairment is identified.
OTHER ASSETS
NOTE 11
Other Assets
(millions of Canadian dollars) 2011 2010
Amounts receivable from brokers, dealers and clients $ 5,035 $ 8,132
Accounts receivable, prepaid expenses and other items1 6,185 6,032
Prepaid pension expense 1,203 1,223
Insurance-related assets, excluding investments 1,300 1,319
Accrued interest 1,061 1,040
Trading commodities2 3,400 2,249
Total $ 18,184 $ 19,995
1
In 2011, the FDIC indemnification assets were reclassified from loans to other assets
on the Consolidated Balance Sheet on a retroactive basis. The balance of these
indemnification assets as at October 31, 2011 was $86 million (October 31, 2010 –
$167 million).
2 Trading commodities consist of physical precious metals inventory and are carried
at fair value less costs to sell, with changes in fair value recorded in Non-interest
income – Trading income in the Consolidated Statement of Income, and are reported
for regulatory purposes to OSFI as cash and cash equivalents.