61 it is a contingent asset, which is commented on in the Notes. Liabilities are recognised on the balance sheet if they have arisen due to past events, a cash outflow is probable and their value can be reliably estimated. If a reliable estimate is not possible, then it is a contingent liability, which is commented on in the Notes. The disclosed balance sheet items are measured individually. Offsetting between assets and liabilities as well as that between profit and loss accounts is in principle not allowed. Receivables and payables are offset only in the following cases: • If they concern the same type of transaction with the same counterparty in the same currency and they have an identical or earlier due date and will never lead to any counterparty risk. • Offsetting of the value adjustments with the corresponding asset items. • Offsetting of positive and negative changes in book value within the netting account with no impact on the income statement in the reference period. Cash assets Ancillary cash assets are recognised on the balance sheet at their face value. Securities financing transactions Securities financing transactions refer to repurchase/reverse repurchase agreements. Sales of securities with a repurchase obligation and acquisitions of securities with an obligation to resell (reverse repurchase) are classified as secured financing transactions. The total value of cash assets received or given as collateral in repurchase and reverse repurchase agreements is carried in the balance sheet, including accrued interest. Interest income from reverse repurchases and the interest expense from repurchases are apportioned over the underlying transaction period. Amounts due from banks and clients, mortgage loans Amounts due from banks, clients and mortgage loans are recognised at their nominal value; any necessary value adjustments are deducted. Value adjustments are made for the default risks of impaired and non-impaired receivables. Impaired receivables, i.e. receivables for which it is unlikely that the obligor will be able to meet its future obligations, are measured individually and the impairment is covered by valuation adjustments. For non-impaired receivables, value adjustments for expected losses are made. The methods applied to identify the risks and determine the needs for value adjustments are described in Note 4.3.6 "Methods used to identify risks of default and to determine any need for value adjustments". For credit facilities (with corresponding credit facility limits) whose use is typically subject to frequent and large fluctuations (e.g. current account credit facilities) and for which provisioning is required, the Bank uses an alternative method to record the required value adjustments and provisions. When the value adjustment is originally recognised, the entire expense is entered under the heading "Changes in value adjustments for risks of default and losses due to interest margin based activities". If facility utilisation changes during the same accounting period, a reclassification with no impact on income is carried out between the value adjustment for the corresponding balance sheet item and the provision for the undrawn part of the credit facility. This adjustment with no impact on net profit is presented in the "Reclassification" column of Table 5.16, "Presentation of value adjustments, provisions and reserves for general banking risks", in the Notes. Amounts due to banks and liabilities resulting from customer deposits These positions are recognised at face value. Precious metal commitments recorded in metal accounts are measured at fair value. Trading operations, commitments resulting from trading operations Positions relating to trading operations are measured and recognised in the balance sheet at their fair value. This is the price based on a priceefficient and liquid market or obtained using a valuation model. Gains and losses made on purchases and sales, as well as unrealised gains and losses arising from fair-value adjustments, are reported under "Net income (expense) from trading activities and the fair value option". Positive and negative replacement values of derivative instruments Derivative financial instruments are used for trading and hedging purposes. Transactions on behalf of clients The replacement values of transactions on behalf of clients are in principle recorded on the balance sheet, if the contract presents a risk of loss for the bank until its maturity: • OTC contracts: replacement values for commission transactions are recorded on the balance sheet. • Exchange-traded contracts: replacement values are not recognised on the balance sheet if the hedging margin is sufficient. If there is no daily margin call or if the accumulated daily loss (variation margin) is not fully covered by the initial margin required, only the uncovered portion is recorded on the balance sheet. Trading book assets All derivative financial instruments in securities trades are measured at fair value and their positive or negative replacement values are recognised in the corresponding columns of the balance sheet. This is the price based on a price-efficient and liquid market or obtained using a valuation model. Realised gains and losses from trading operations and unrealised gains and losses on the valuation of trading operations are recorded under "Result from
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