Obligation Rabbobank 3.125% ( CH0026620846 ) en CHF

Rabbobank

100 % ▼

Pays-Bas

CH0026620846 ( en CHF )

3.125% par an ( paiement annuel )

14/09/2026

Prospectus brochure de l'obligation Rabobank CH0026620846 en CHF 3.125%, échéance 14/09/2026

5 000 CHF

500 000 000 CHF

15/09/2026 ( Dans 314 jours )

Rabobank est une banque coopérative d'origine néerlandaise et un acteur mondial majeur du financement de l'agriculture et de l'alimentation.

L'Obligation émise par Rabbobank ( Pays-Bas ) , en CHF, avec le code ISIN CH0026620846, paye un coupon de 3.125% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 14/09/2026

P r o s p e c t u s d a t e d 11 S e p t e m b e r 2006
C o ö p e r a t i e v e C e n t r a l e R a i f f e i s e n - B o e r e n l e e n b a n k B . A .
( R a b o b a n k N e d e r l a n d )
Utrecht, The Netherlands
3 . 1 2 5 % B o n d s 2 0 0 6 - 2 0 2 6 o f C H F 2 0 0 , 0 0 0 , 0 0 0
- with reopening clause -
The o u t s t a n d i n g long-term d e b t of t h e Issuer is rated "AAA" by S t a n d a r d & P o o r ' s
Rating Group and "Aaa" by Moody's.
Issuer: Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., Croeselaan 18, NL-3521
CB Utrecht, The Netherlands
Issue Price: The Syndicate Banks named below have purchased the Bonds at the price of
100.98% (before commissions).
Placement Price: According to supply and demand
Life: 20 years bullet
Form and Delivery: The Bonds will be represented by a permanent global certificate. Holders of
Bonds do not have the right to request the printing and delivery of definitive
Bonds.
Denomination: CHF 5,000 nominal and multiples thereof
Payment Date: 15 September 2006
Redemption Date: 15 September 2026
Early Redemption: For tax reasons only, anytime at par following a notice period according to the
terms and conditions of the Bonds.
Reopening: Rabobank Nederland reserves the right to reopen this issue of Bonds according
to the terms and conditions of the Bonds.
Assurances: Pari passu clause, negative pledge clause and cross default clause
Listing: The listing of the Bonds on the main segment of the SWX Swiss Exchange will
be applied for. The Bonds have provisionally been admitted to trading as of
12 September 2006.
Law and Jurisdiction: The Bonds and all contractual documentation are governed by and shall be
construed in accordance with Swiss law. Place of jurisdiction will be the courts of
Zurich 2.
Selling Restrictions: United States of America and U.S. Persons, United Kingdom, Italy and European
Economic Area
Swiss Security No.: 2662084 / ISIN: CH0026620846 / Common Code: 026432081
Joint Lead Managers
B a y e r i s c h e H y p o - und Vereinsbank Aktiengesellschaft, Z ü r c h e r K a n t o n a l b a n k
Munich, Zurich Branch
Senior Co-Lead Manager
Bank Sarasin & Co. Ltd.
Co-Lead Managers
Bank Coop AG, ABN AMRO Bank N.V., Zurich Branch, Bank Vontobel Ltd., Lombard Odier Darier Hentsch & Cie,
Pictet & Cie, Swiss Union of Raiffeisen Banks, UBS Investment Bank

S E L L I N G R E S T R I C T I O N S
A) United S t a t e s of America / U.S. p e r s o n s
1. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, a s amen-
ded (the "Securities Act") and may not be offered or sold within the United States of America (the
"United States") or to, or for the account or benefit of, U.S. persons except in certain transactions
exempt from or not subject to the registration requirements of the Securities Act.
The Syndicate Banks have not offered or sold the Bonds, and will not offer or sell the Bonds (i) a s part
of their distribution at any time or (ii) otherwise until 25 October 2006, except in accordance with Rule
903 of Regulation S under the Securities Act.
Accordingly, neither the Syndicate Banks and their affiliates nor any persons acting on their behalf have
engaged or will engage in any selling activities directed towards the United States with respect to the
Bonds, and they have complied and will comply with the offering restrictions requirement of Regulation
S. The Syndicate Banks agree that, at or prior to confirmation of any sale of Bonds, they will have sent
to each distributor, dealer or person receiving a selling commission, fee or other remuneration that pur-
c h a s e s Bonds from them during the Restricted Period (as defined below), a notice substantially to the
following effect:
"The Bonds covered hereby have not been registered under the U.S. Securities Act of 1933 a s amend-
ed (the "Securities Act") and may not be offered or sold within the United States of America or to, or
for the account or benefit of, U.S. persons (i) a s part of their distribution at any time or (ii) otherwise until
25 October 2006, except in either c a s e in accordance with Regulation S under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
Terms used in this paragraph 1 have the meanings given to them by Regulation S under the Securities
Act.
2. The Syndicate Banks represent and agree that they have not entered and will not enter into any con-
tractual arrangement with respect to the distribution or delivery of the Bonds except with its affiliates
or with the prior written consent of the Issuer.
3. In addition,
(1) except to the extent permitted under U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D) (the "D Rules"),
a) the Syndicate Banks represent and agree that they have not offered or sold and during the
Restricted Period will not offer or sell Bonds to a person who is within the United States or
its possessions or to a United States person, and that it will use reasonable efforts to sell the
Bonds in Switzerland, and
b) the Syndicate Banks represent and agree that they have not delivered and will not deliver
within the United States or its possessions Bonds that are sold during the Restricted Period;
(2) the Syndicate Banks represent and agree that they have and throughout the Restricted Period will
have in effect procedures reasonably designed to ensure that its employees or agents who are
directly engaged in selling Bonds are aware that Bonds may not be offered or sold during the
Restricted Period to a person who is within the United States or its possessions or to a United
States person, except a s permitted by the D Rules;
(3) if the Syndicate Banks are a U.S. person, they represent that they are acquiring Bonds in bearer
form for the purposes of resale in connection with the original issuance of Bonds and if they retain
Bonds in bearer form for their own account, it will only do so in accordance with the requirements
of U.S. Treas. Reg. §1.163-5(c)(2)(i)(D)(6); and

20 Rabobank Group Consolidated Financial Statements 2005
Property and equipment are regularly submitted to impairment testing. If the carrying amount of an asset exceeds its
estimated recoverable amount, the carrying amount is written down immediately to the recoverable amount. Gains and
losses on the disposal of items of property and equipment are determined in proportion to their carrying amounts and
taken into account when determining the operating result. Repair and maintenance work is charged to profit and loss at
the time the costs are incurred. Expenditures on extending or increasing the benefits from land and buildings compared
with their original benefits are capitalised and subsequently depreciated.
Finance expenses incurred during the creation of an asset for use or sale are charged to profit and loss for the period in
which they are incurred.
2.18 Investment properties
Investment properties, mainly office buildings, are held for their long-term rental income and are not used by Rabobank or
its subsidiaries. Investment properties are recognised as long-term investments and included on the balance sheet at cost,
net of accumulated depreciation.
2.19 Leases
2.19.1 Rabobank as lessee
Leases relating to property and equipment under which substantially all the risks and benefits of ownership are transferred
to Rabobank are classified as finance leases. Finance leases are capitalised at the inception of the lease at the fair value of
the leased assets or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between the lease liability and the finance charges, so as to achieve a constant rate of interest on the remaining balance
of the liability. The corresponding lease liabilities are included under other loans, after deduction of finance charges.
The interest components of the finance charges are recognised in profit and loss over the term of the lease. An item of
property and equipment acquired under a lease agreement is depreciated over the useful life of the asset or, if shorter, the
term of the lease.
Leases under which a substantial portion of the risks and benefits of ownership of the assets are retained by the lessor are
classified as operating leases. Operating lease payments (less any discounts given by the lessor) are charged to profit and
loss on a straight-line basis over the term of the lease.
2.19.2 Rabobank as lessor
Finance leases
If assets are leased under a finance lease, the present value of the lease payments is recognised as a receivable under
'Due from other banks' or 'Loans to customers'. The difference between the gross receivable and the present value of the
receivable is recognised as unearned finance income. Lease income is recognised as interest income over the term of the
lease using the net investment method, which results in a constant rate of return on the investment.
Operating leases
Assets leased under operating leases are included on the balance sheet under 'Property and equipment'. The assets are
depreciated over their expected useful lives in line with those of comparable items of property and equipment. Rental
income (less discounts granted to lessees) is recognised under 'Other income' on a straight-line basis over the term of
the lease.

Rabobank Group Consolidated Financial Statements 2005 19
2.16 Goodwill and other intangible assets
2.16.1 Goodwill
Goodwill is the amount by which the acquisition price paid for a subsidiary or associate exceeds the fair value on the
acquisition date of Rabobank's share of the net assets and the unconditional liabilities of the entity acquired. Goodwill
on acquisitions made on or after 1 January 2004 is recognised on the balance sheet as an intangible asset net of any
impairment losses. Goodwill on the acquisition of a subsidiary made before 1 January 2004 was charged directly to equity.
Goodwill in such case has not been capitalised retrospectively, as allowed under IFR5.
2.16.2 Software development costs
Costs related to the development or maintenance of computer programs are recognised as an expense at the time they
are incurred. Costs directly incurred in connection with identifiable and unique software products over which Rabobank
has control and that wil probably provide economic benefits exceeding the costs for longer than a year are recognised
as intangible assets. Direct costs include the employee expenses of the software development team and an appropriate
portion of the relevant overhead.
Expenditures that improve the performance of computer programs compared with their original specifications are added
to the original cost of the software. Computer software development costs recognised as assets are amortised on a
straight-line basis over a period not exceeding three years.
2.16.3 Insurance contracts acquired as part of a business combination or portfolio transfer
The fair value (present value of the expected future cash flows) of contractual insurance rights and obligations are capitalised
as intangible assets and amortised over the term of the contract, which is generally between 2 and 5 years. The net asset
undergoes an impairment test each year based on the expected future cash flows from the acquired insurance contracts.
An impairment loss is recognised if the expected future profits do not justify the carrying amount of the asset.
2.16.4 Impairment losses on goodwill and other intangible assets
At each balance sheet date, Rabobank assesses whether there are indications of impairment losses on goodwill and other
intangible assets. If such indications exist, impairment testing is carried out to determine whether the carrying amount of
goodwill and other intangible assets are fuly recoverable. An impairment loss is recognised if the carrying amount is
greater than the recoverable amount.
2.17 Property and e q u i p m e n t
Equipment (for own use) is recognised at historical cost net of accumulated depreciation.
Property (for own use) represents mainly offices and is also recognised at cost less accumulated depreciation.
Straight-line deprecation is applied to these assets in accordance with the schedule below. Each asset is depreciated to its
residual value over its estimated useful life.
- Land Not depreciated
- Buildings 25-40 years
Equipment, including the following:
- Computer equipment 1-3 years
- Other equipment and vehicles 3-8 years

18 Rabobank Group Consolidated Financial Statements 2005
Translation differences on debt securities and other monetary financial assets carried at fair value are included under
foreign exchange gains and losses. Translation differences on non-monetary items such as equity instruments held for
trading are recognised as part of the fair value gains or losses. Translation differences on available-for-sale non-monetary
items are included in the revaluation reserve reported under equity.
2.13 Interest
Interest income and expenses for all interest-bearing instruments are recognised in profit and loss according to the
allocation principle, with the effective interest method being applied to the actual purchase price. Interest income includes
coupons relating to fixed-interest financial assets and trading financial assets, as well as the cumulative premiums and
discounts on government treasury securities and other cash equivalent instruments. If any loans suffer impairment losses,
they are written down to their recoverable amounts and the interest income recognised henceforth is based on the
discount rate for calculating the present value of the future cash flows used to determine the recoverable amounts.
2.14 Fees a n d commission
Income from asset management activities consists mainly of unit trust and fund management commission and administra-
tion fees. Fees are also received for insurance activities relating to pension management and employee healthcare.
Income from asset management and insurance activities is recognised as earned when the services are provided.
Fees and commission are generally recognised according to the allocation principle. Fees and commission received for
negotiating a transaction, or taking part in the negotiations, on behalf of third parties, for example the acquisition of a
portfolio of loans, shares or other securities, or the sale or purchase of companies, are recognised at completion of the
underlying transactions.
2.15 Loans t o customers and d u e from other banks
Loans to customers and due from other banks are not derivative financial instruments with fixed or defined payments, not
listed on active market, apart from such assets that Rabobank classifies as trading, at fair value on initial recognitions with
changes recognised through profit and loss, or as available for sale. These loans and receivables are measured at amortised
cost, including transaction costs.
A value adjustment, for losses on loans, is recognised if there is objective evidence that Rabobank wil not be able to collect
all amounts due under the original terms of the contract. The size of the reserve is the difference between the carrying
amount and recoverable amount, which is the present value of the expected cash flows, including amounts recoverable
under guarantees and sureties, discounted at the original effective rate of interest of the loans.
The reserve for loans includes losses if there is objective evidence that losses are attributable to some portions of the loan
portfolio at the balance sheet date. These are estimated based on the historical pattern of losses for each separate portion
and the credit ratings of the borrowers, and taken into account the actual economic conditions under which the borrowers
conduct their activities. If a loan is not collectible, it is written off from the related reserve for losses on loans. Any amounts
subsequently collected are included under the item 'Value adjustments' on the profit and loss account.

Rabobank Group Consolidated Financial Statements 2005 i 7
If a transaction does not meet the above conditions for derecognition, it is recognised as a loan for which security has
been provided.
To the extent that the transfer of a financial asset does not qualify for derecognition, the transfer does not result in
Rabobank's contractual rights being separately recognised as derivative financial instruments if recognition of these
instruments and the transferred asset, or the liability arising on the transfer, were to result in double recognition of the
same rights or obligations.
Gains and losses on securitisations and sale transactions depend partly on the previous carrying amounts of the financial
assets involved in the transfer. The carrying amounts of the assets in question are allocated to the sold and retained
interests based on the relative fair values of these interests at the date of sale. Any gains and losses are recognised at the
time of transfer under 'Trading income'.
The fair value of the sold and retained interests is based on quoted market prices or calculated as the present value of the
future expected cash flows, using pricing models that take into account various assumptions such as credit losses, discount
rates, yield curves, payment frequency and other factors.
Rabobank decides for each securitisation transaction whether the securitisation instrument should be included in the con-
solidated financial statements. For this purpose, it performs an assessment by taking a number of factors into consideration,
for example the activities of the SPE, decision-making powers and the allocation of the benefits and risks associated with
the activities of the SPE.
2.11 Netting of financial assets and liabilities
Financial assets and liabilities are set off and the net amount is transferred to the balance sheet if a legal right to set off the
recognised amounts exists and it is intended to settle the expected future cash flows on a net basis, or to realise the asset
and settle the liability simultaneously.
2.12 Foreign currencies
2.12.1 Foreign entities
Items included in the financial statements of each entity in the Group are carried in the currency that best reflects the
economic reality of the underlying events and circumstances that are relevant for the entity (the functional currency).
The consolidated financial statements are presented in euros, which is the parent company's functional currency.
Gains, losses and cash flows of foreign entities are translated into the presentation currency of Rabobank at the exchange
rates on the transaction dates, which are approximately equal to the average exchange rates. For balance sheet purposes,
they are translated at the exchange rates on 31 December. Translation differences arising on the net investments in foreign
entities and on loans and other currency instruments designated as hedges of these investments are recognised in equity.
If a foreign entity is sold, any such translation differences are recognised in profit and loss as part of the gain or loss on
the sale.
Goodwill and fair-value adjustments arising on the acquisition of a foreign entity are recognised as assets and liabilities of
the foreign entity and are translated at the closing rate.
2.12.2 Transactions in foreign currencies
Transactions in foreign currencies are translated into the functional currency at the exchange rates ruling at the transaction
date. Translation differences arising on the settlement of such transactions or on the translation of monetary assets and
liabilities denominated in foreign currencies are recognised in profit and loss, unless they are recognised in equity as
qualifying cash flow hedges.

16 Rabobank Group Consolidated Financial Statements 2005
Al purchases and sales made in accordance with standard market conventions for available-for-sale financial assets are
recognised at the transaction date. Al other purchases and sales are recognised as forward derivative contracts until their
dates of settlement.
2.8 Held-to-maturity financial assets
Financial assets with fixed terms are classified as held-to-maturity financial assets, provided management intends to keep
them for their ful terms and is in a position to do so. Management determines the appropriate classification for its
investments on their acquisition dates.
Held-to-maturity financial assets are carried at amortised cost based on the effective interest method, net of
provisions for impairment losses as necessary.
Interest earned on held-to-maturity financial assets is recognised as interest income.
Al purchases and sales made in accordance with standard market conventions for held-to-maturity financial assets are
recognised at the date of settlement. Al other purchases and sales are recognised as forward derivative contracts until
their dates of settlement.
2.9 Repurchase and reverse repurchase contracts
Financial assets that are sold subject to related sale and repurchase contracts are included in the financial statements under
Trading financial assets' and Available-for-sale financial assets'. The liability to the counterparty is included under Due to
other banks' and 'Due to customers' depending on the application.
Financial assets acquired under reverse sale and reverse repurchase contracts are recognised as:
- Due from other banks, or
- Loans to customers,
depending on the application. The difference between the selling and repurchasing price is recognised as interest income
or expense over the term of the agreement, based on the effective interest method.
2.10 Securitisations and other derecognition constructions
Rabobank securitises, sells and carries various financial assets that it sometimes sells to special purpose entities, which then
issue securities to investors. Rabobank has the option of retaining an interest in sold securitised financial assets in the form
of subordinated interest-only strips, subordinated securities, spread accounts, servicing rights, and guarantees, put options
and call options, and other constructions.
A financial asset (or a portion of a financial asset) is derecognised if:
- the rights to the cash flows from the asset expire;
- the rights to the cash flows from the asset and a substantial portion of the risks and benefits of ownership of the asset are
transferred;
- a commitment to transfer the cash flows from the asset is presumed and a substantial portion of the risks and benefits
are transferred;
- not all the risks and benefits are retained or transferred; however control over the asset is transferred.
If Rabobank retains control over the asset but does not retain a substantial portion of the rights and benefits, the asset is
recognised in proportion to the continuing involvement of Rabobank. A related liability is also recognised to the extent of
Rabobank's continuing involvement. The recognition of changes in the value of the liability corresponds to the recognition
of changes in the value of the asset.

Rabobank Group Consolidated Financial Statements 2005 15
2.4 Trade liabilities
Trade liabilities are mainly negative fair values of derivative financial instruments and delivery obligations arising on short
selling of securities. Securities are sold short to realise gains from short-term price fluctuations. The securities needed to
settle the short selling are acquired through securities leasing or sale and repurchase contracts. Securities sold short are
recognised at fair value at the balance sheet date.
Trade liabilities also include certain financial liabilities that Rabobank does not intend to sell, but which it designated as
held for trading on initial recognition and recognised at fair value. Changes in the fair value of these financial liabilities are
recognised in profit and loss for the period in which they arise.
2.5 Trading financial assets
Trading financial assets are acquired to realise gains from short-term fluctuations in the prices or margins of traders, or form
part of a portfolio that regularly generates short-term gains.These assets are initially recognised at cost and subsequently
revalued to fair value based on quoted bid prices. Any realised and unrealised gains and losses are included under 'Trading
income'. Interest earned on trading financial assets is recognised as interest income. Dividends received on trading financial
assets is recognised as dividend income.
Al purchases and sales of trading financial assets that have to be delivered within a period prescribed by regulations or
market convention are recognised at the transaction date. Other trading transactions are recognised as derivative financial
instruments until the date of settlement.
2.6 Non-trading financial assets and liabilities at fair value through profit and loss
Rabobank has opted to classify financial instruments not acquired or entered into for realising gains from short-term
fluctuations in traders' prices or margins at fair value through profit and loss. These financial assets are carried at fair value.
Interest earned on assets with this classification is recognised as interest income and interest due on liabilities with this
classification is recognised as interest expense. Dividends received on the financial assets are included under dividend
income. Any other realised and unrealised gains and losses on revaluation of these financial instruments to fair value are
included under 'Net income from non-trading financial assets and liabilities at fair value through profit and loss'.
2.7 Available-for-sale financial assets
Management determines the appropriate classification of a financial asset on its date of acquisition.
Financial assets that are intended to be held indefinitely or sold for liquidity purposes or in response to changes in interest
rates, exchange rates or share prices are classified as available for sale.
Available-for-sale financial assets are initially recognised at costs (which includes transaction costs). These assets are
subsequently revalued to fair value based on quoted bid prices or values derived from cash flow models. The fair values
of unlisted equity instruments are estimated based on appropriate price/earnings ratios, adjusted to reflect the specific
circumstances of the respective issuers. Any unrealised gains and losses from changes in the fair value of available-for-sale
financial assets are recognised in equity unless they relate to amortised interest. If such financial assets are disposed of or
suffer impairment losses, the adjustments to fair value are recognised in profit and loss as gains or losses on available-for-
sale financial assets.
An impairment loss is recognised on a financial asset if its carrying amount exceeds its estimated recoverable amount.
The recoverable amount of an instrument carried at fair value is the present value of the expected future cash flows,
discounted at the current market rate of interest on a comparable financial asset.
If the fair value of securities cannot be reliably measured, they are carried at cost.

14 Rabobank Group Consolidated Financial Statements 2005
2.3.2 Instruments not used for hedging
Realised and unrealised gains and losses on derivative financial instruments classified by Rabobank as held-for-trading are
recognised under 'Trading income'.
2.3.3 Hedging instruments
Rabobank also uses derivative financial instruments as part of balance sheet control to manage its interest rate risks, credit
risks and foreign currency risks.
On the date of concluding a derivative contract, Rabobank can designate certain derivative financial instruments as (1) a
hedge of the fair value of an asset or liability on the balance sheet (fair value hedge), as (2) a hedge of future cash flows
attributable to an asset or liability on the balance sheet, an expected transaction or a non-current liability (cash flow
hedge), or as (3) a hedge of a net-investment in a foreign entity (net investment hedge). Derivative financial instruments
can be qualified as hedging instruments if certain criteria are met.
These criteria include:
- Preparation of formal documentation of the hedging instrument, the hedged item, the objective of the hedge, the
hedging strategy and the hedge relationship before applying hedge accounting;
- The hedge is expected to be highly effective (in a range of 80% to 125%) in offsetting changes in the hedged item's fair
value or cash flows attributable to the hedged risks during the entire reporting period; and
- The hedge is continuously highly effective from inception onwards.
Changes in the fair value of derivative financial instruments that are designated as fair value hedges and are highly effective
in relation to the hedged risks are recognised in profit and loss, together with the corresponding changes in the fair value
of the assets or liabilities hedged against the risks in question.
If the hedge no longer meets the criteria for hedge accounting (according to the fair value hedge model), any adjustment
to the carrying amount of a hedged interest-bearing financial instrument is amortised through profit and loss until the end
of the hedged period. Any adjustment to the carrying amount of a hedged equity instrument is recognised under 'Profits
and losses not disclosed in the profit and loss account' until disposal of the equity instrument.
Changes in the fair value of derivative financial instruments that are designated and qualify as cash flow hedges and that
are highly effective in relation to the hedged risks are recognised in the hedging reserve included under equity (see note
11). The non-effective part of the changes in the fair values of the derivative financial instruments are recognised in profit
and loss. If the forecast transaction or non-current liability results in the recognition of an asset or a liability, any deferred
gain or loss included in equity are restated to the initial carrying amount (cost) of the asset or liability. In all other cases,
deferred amounts included in equity are taken to the profit and loss account and are classified as income or expenses in
the periods in which the hedged non-current liability or forecast transaction had an effect on profit and loss.
Certain derivative contracts, although they are effective economic hedges in relation to the managed risk positions taken
by Rabobank, do not qualify for hedge accounting under the specific IFRS rules. These contracts are therefore treated as
derivative trading financial instruments, with the fair value of gains and losses being reported under Trading income'.
Rabobank hedges the credit risks of loan portfolios with economic hedges based on credit default swaps and does not
apply hedge accounting to these instruments. However, if Rabobank recognises an impairment loss on a loan hedged with
this type of economic hedge, the gain on the credit default swap is set off against expenses/gains related to credit losses.
The fair value of derivative financial instruments held for trading and hedging purposes is disclosed in note 11, 'Derivative
financial instruments and other trade liabilities'.

Rabobank Group Consolidated Financial Statements 2005 13
2.2 Group financial statements
2.2.1 Subsidiaries
Subsidiaries and other entities (including special purpose entities) over which Rabobank exercises control, directly or
indirectly, are consolidated. The assets, liabilities and results of these entities are consolidated in ful.
Subsidiaries are consolidated from the date on which Rabobank obtains control, and cease to be consolidated on the
date that this control ends. Al intra-group transactions, balances and unrealised gains and losses on transactions between
business units of Rabobank are eliminated as part of the consolidation.
2.2.2 Joint ventures
The interests of Rabobank in entities where control is shared are consolidated proportionally. With this method, Rabobank
includes its share of the income and expenses, assets and liabilities, and cash flows of the various joint ventures in the
relevant items of its financial statements.
2.2.3 Investments in associates
Investments in associates are recognised in accordance with the equity method. With this method, Rabobank's share of
the profits and losses of an associate (after the acquisition) is recognised in profit and loss, and its share of the changes in
reserves after the acquisition is recognised in reserves. The cumulative changes after acquisition are adjustments to the
cost of the investment.
Associates are entities in which Rabobank holds between 20% and 50% of the voting rights and over which Rabobank has
significant influence but does not exercise control. Unrealised gains on transactions between Rabobank and its associates
are eliminated in proportion to the size of Rabobank's interest in the associates. Unrealised losses are also eliminated unless
the transaction indicates that an impairment loss should be recognised on the asset transferred. Investments by Rabobank
in associates include the goodwill acquired. If Rabobank's share in the losses of an associate equals or exceeds its interest in
the associate, Rabobank will not recognise any more losses of the associate unless Rabobank has given undertakings or
made payments on behalf of this associate.
2.3 Derivative financial instruments and hedging
2.3.1 General
Derivative financial instruments generally mean foreign currency contracts, currency and interest rate futures, forward rate
agreements, currency and interest rate swaps, and currency and interest rate options (written as well as acquired).
Derivative financial instruments might be traded on an exchange or as over- the-counter (OTC) instruments between
Rabobank and a client. Al derivative financial instruments are recognised at inception on the balance sheet at cost and
subsequently revalued to fair value. The fair value is determined using listed market prices, prices offered by traders,
cash-flow discounting models and option valuation models based on current market prices and contracted prices for the
underlying instruments, as well as the time value of money, yield curves and the volatility of the underlying assets and
liabilities. Al derivative financial instruments are included under assets if their fair value is positive and under liabilities if
their fair value is negative.
Derivative financial instruments that are embedded in other financial instruments are treated separately if their risks and
characteristics are not closely related to those of the underlying derivative contract and this contract is not classified at fair
value through profit and loss.