Glossary of Terms

Asset Revaluation Reserves: The temporary increase or decrease in valuation of certain assets as
compared with historical cost. The change in value is credited to the asset revaluation reserve account.
Bonds and Notes Payable: The bank's liability for long-term financing issued in the wholesale markets.
Current and Deferred Tax Assets: The current and future (deferred) tax savings to the bank as a result
of timing differences that arise due to different treatment of transactions under accounting and tax rules.
Customers Liabilities for Acceptances: the amounts owed to the bank from customers for acceptances,
a form of lending.
Define Benefit Pension Scheme Liabilities: A defined benefit pension scheme is where the bank
promises to pay a specific benefit on an employee's retirement that is predetermined by a formula. It is
'defined' as the formula for contribution is known in advance, and hence, is considered a liability of the
bank.
Deposits and Other Borrowings: This represents the bank's obligation to depositors.
Derivative Financial Instruments: Financial instruments that the bank holds whose value is derived
from the value of something else (e.g. Options, futures, swaps).
Due from other Financial Institutions: the monies owed to the bank from other financial institutions
and banks.
Due to other Financial Institutions: The monies owed by the bank to other financial institutions and
banks.
General Reserves: General reserves are funds that are set aside for the purpose of covering possible
losses that have not yet been specifically identified (i.e. For 'general' purposes rather than for a specific
future loss/expense).
Goodwill and Intangibles: Goodwill and intangibles refers to the assets of the business which are not
physical assets. This reflects the brand name, customer relations, employee relations, and any patents the
company has.
Hedging Derivative Liabilities: Hedging derivatives are used for the purposes of reducing or eliminating
financial risk. They are liabilities here as their fair value is negative.
Income Tax Liabilities: The amounts payable with respect to income tax.
Investment Securities (Available for Sale Assets): Investment securities comprise of non-derivative
financial assets which the bank considers to be 'available for sale' but which are not considered trading
securities (the bank expects to hold these until maturity).
Liability on Acceptances: The amounts owed to customers who have purchased customer acceptances
from the bank.
Life Insurance Policy Liabilities: This refers to the obligation of the bank to pay out a particular amount
on a life insurance policy in the event of the insured's death.
Managed Fund Units on Issue: This refers to the claims of individuals who have purchased 'units' in an
investment portfolio that is managed by the bank.

Ordinary Shares: The amounts received when shares were originally subscribed for.
Other Assets: This includes assets that do not fit into the categories listed on the Balance Sheet, and
includes the increase in market value of amounts receivable from derivatives (refer also to 'Payables and
other liabilities) and interest accrued and not yet received.
Other Liabilities: 'Other Liabilities' includes various operating creditors, and accrued interest payable.
Outside Equity Interest (Minority Interest): This reflects the allocation of profit to minority interest in
the bank.
Perpetual Floating Rate Notes: This is a perpetual debt instrument with a variable interest rate. There
is no maturity date for the floating rate note.
Preference Shares: Fixed income shares whose shareholders have the right to receive dividends and
repayment of their investment in the bank before any ordinary shareholders.
Premises and Equipment: The value of all the land, buildings, equipment, etc which are owned by the
bank.
Provisions: the bank's accrued obligations for long service leave, annual leave, and other obligations,
which although known, are not yet payable.
Regulatory Deposits: the cash the bank has deposited at central banks to meet regulatory requirements.
Retained Profits: This is the portion of net income that is retained by the bank rather than being
distributed to the owners.
Shares in Associates and Joint Venture Entities: The investment in companies where the interest is
large enough to provide significant influence rather than control over the company, or where the bank
has joint control.
Subordinated Debt: Subordinated debt refers to debt that is unsecured or has a lower priority claim. It is
considered part of equity because it is long-term debt capital.
Trading Derivative Liabilities: Trading derivatives are complicated financial instruments that derive
their value from something else and are bought and sold for the purpose of short-term profit taking. They
are considered to be a liability when their fair value is negative.
Trading Securities: The securities held by the bank that are regularly bought and sold as part of its
normal trading activities with a view to short-term profit taking.