2 Accounting and valuation principles

General principles

The accounting and valuation principles comply with the Swiss Code of Obligations, the Swiss Banking Act and the related ordinance as well as the Accounting Ordinance of the Swiss Financial Market Supervisory Authority (FINMA) (FINMA AO) and the accounting rules for banks, investment firms, financial groups and conglomerates in accordance with FINMA Circular 2020/01 ‘Accounting – Banks’. The consolidated annual financial statements present a true and fair view of the assets, financial position and results of operations of the LUKB Group. The individual figures are rounded for publication. The calculations, however, were made on the basis of unrounded figures.

Scope of consolidation

The consolidated annual financial statements comprise the financial statements of the parent company as well as of the Group companies held directly or indirectly in which LUKB holds a majority of the voting rights or capital (see sections ‘Disclosures on significant participations’ and ‘Consolidation method’).

Consolidation method

The company mentioned in the ‘Fully consolidated participations’ paragraph in the ‘Disclosures on significant participations’ section is included in the consolidated financial statements using the full consolidation method. For capital consolidation, the valuation is carried out at the time of acquisition using the purchase method. Under this method, assets and liabilities as well as expenses and income are recognised in full. Significant non-controlling interests with holdings of between 20 % and 50 % are accounted for in the consolidated annual financial statements using the equity method. In the case of intermediate holdings, the holding amount is determined by reference to the operating unit. Any surplus of assets resulting from the initial valuation (goodwill) is recognised under ‘Intangible assets’ and amortised over its useful life. Capitalised goodwill is generally amortised over a period of five years or, in justified cases, over a maximum of ten years. Goodwill for which recognition is no longer warranted on the basis of an assessment as at the balance sheet date is additionally written down at the appropriate time. This assessment is carried out if there are indications of impairments. Intra-Group transactions are eliminated during the preparation of the consolidated annual financial statements. There are no interim profits.

Consolidation period

The consolidation period corresponds to the respective calendar year. If consolidated subsidiaries have financial years that differ from the calendar year, interim financial statements are prepared as at the balance sheet date.

Detailed provisions

General valuation principles

The valuation is based on the assumption that the Group and the Group companies are going concerns. Accordingly, the annual financial statements are prepared on a going-concern basis.

The items reported and included in a balance sheet item are valued individually. If the value of assets is impaired as at the balance sheet date, individual value adjustments and write-downs are recognised. The following items are valued at nominal value:

Balance sheet: Assets

• Liquid assets
• Amounts due from banks
• Amounts due from securities financing transactions
• Amounts due from clients
• Mortgage loans

Balance sheet: Liabilities

• Amounts due to banks
• Liabilities from securities financing transactions
• Amounts due in respect of customer deposits
• Cash bonds
• Bond issues and central mortgage institution loans

Off-balance sheet

• Contingent liabilities
• Irrevocable commitments
• Liabilities relating to calls on shares and other equity securities
• Credit commitments
• Fiduciary transactions

For credit-related default risks, value adjustments are recognised for assets, and provisions are established for off-balance-sheet items. Interest and discounts are accrued over time and recognised under ‘Gross result from interest business’.

As a general principle, there is no offsetting of assets and liabilities. However, assets and liabilities can be offset in the following cases:

• Receivables and liabilities, provided they arise from transactions of the same type with the same counterparty, have the same or earlier due date as the receivable, are denominated in the same currency and do not give rise to counterparty risk. These conditions must be fulfilled cumulatively;
• Positive and negative value adjustments not recognised in profit or loss in the adjustment account;
• Deferred income tax liabilities with deferred income tax assets, provided they concern both the same taxable entity and the same tax authority;
• Netting of positive and negative replacement values of derivative financial instruments and cash collaterals deposited in this context, provided that recognised and legally enforceable netting agreements exist.

Assets and liabilities are also offset in the following cases:

• Own debt securities with the corresponding liability position;
• value adjustments with the corresponding asset position;
• Sub-participations granted as the lead bank in a loan transaction with the corresponding principal claim.

As a general principle, there is no offsetting of expenses and income. However, expenses and income can be offset in the following cases:

• Newly formed value adjustments for default risks and losses from interest business with the corresponding recoveries and released value adjustments (reported under ‘Changes in value adjustments for default risk and losses from interest operations’);
• Newly formed provisions and other value adjustments and losses with the corresponding recoveries and released provisions and value adjustments (reported under ‘Changes to provisions and other value adjustments and losses’);
• Gains on trading activities and transactions measured using the fair value option with the losses on these transactions;
• Positive value adjustments of financial assets valued according to the lower-of-cost-or-market principle with the corresponding negative value adjustments;
• Expenses and income from real estate are reported under ‘Property income’;
• The refinancing result from trading activities under ‘Result from trading activities and the fair value option’;
• Income from hedging transactions with corresponding income from the hedged transaction;

Liquid assets

Liquid assets comprise coins, banknotes and sight deposits held at the Swiss National Bank and at FINMA-recognised clearing centres.

Amounts due from and liabilities from securities financing transactions

As part of repurchase transactions, the LUKB Group sells securities from the investment portfolio and money market book claims with a corresponding repurchase obligation and, as part of reverse repurchase transactions, buys securities with a corresponding selling obligation. Repurchase transactions are treated as cash deposits with the pledging of own securities, while reverse repurchase transactions are treated as advances secured by securities. Lending transactions with securities that are not collateralised by cash are not recognised in the balance sheet, but are disclosed in the notes.

Reimbursement claims and obligations from securities lending and borrowing arising from cash contributions posted or received for borrowed or loaned non-monetary securities are also disclosed under ‘Amounts due from securities financing transactions’ and ‘liabilities from securities financing transactions’. Expenses and income arising in connection with securities lending and borrowing (e.g. compensation payments for dividends or interest on lent securities) are recognised under ‘Result from trading activities and the fair value option’.

Amounts due from banks, amounts due from clients and mortgage loans

Value adjustments are made for identifiable risks of loss, whereby specific value adjustments for impaired loans/receivables and value adjustments for inherent default risks on non-impaired loans/receivables (including those for country risks) are offset against the loans/receivables. The methods used for determining value adjustments are described in Section 4 ‘Methods used for identifying default risks and determining the need for value adjustments and provisions’. As mentioned in Section 4, the basis for determining the value adjustment of loans/receivables is at least the agreed credit limit. The use of this limit for overdraft facilities is typically subject to frequent and significant fluctuations. For this reason, the entire value adjustment (both for the loan/receivable portion and the unused limit portion) is recognised for the first time under ‘Changes in value adjustments for default risk and losses from interest operations’. The corresponding offsetting entry is made:

• in the amount of the loan/receivable less any liquidation proceeds from collateral as a value adjustment to the corresponding balance sheet item,
• in the amount of the unused limit or of the remaining value adjustment as a provision.

This means that loans to customers are recognised in the balance sheet at least to the extent of the recoverable collateral.

If the amount of the loan/receivable and thus also the proportion of the unused limit changes, the corresponding amount is reclassified between the value adjustment on the corresponding balance sheet item and the provision without affecting profit or loss. This reclassification is shown in the column ‘Reclassifications’ in Table 8.14 ‘Value adjustments and provisions / reserves for general banking risks’. The value of the impaired loan/receivable is adjusted as mentioned in Section 4, taking into account any liquidation proceeds from collateral. As a result, the impaired loan/receivable remains on the balance sheet in the amount of the liquidation proceeds. Recoveries on impaire loans/receivables are offset directly against value adjustments or provisions for credit risks. Value adjustments and provisions that are no longer required are reversed under ‘Changes in value adjustments for default risk, and losses from interest operations’.

Trading portfolio assets and liabilities

Securities, precious metals and cryptocurrencies that are actively managed and therefore held for current trading purposes are valued at fair value as at the balance sheet date (value on a price-efficient and liquid market). Valuation gains or losses form part of ‘Result from trading activities and the fair value option’. Interest and dividend income is likewise reported under ‘Result from trading activities and the fair value option’. Securities purchases made in connection with the hedging of structured products issued by LUKB form an integral part of the trading business. For the treatment of own debt and equity securities, please refer to the corresponding Section.

Positive and negative replacement values of derivative financial instruments

The positive and negative replacement values of derivative financial instruments are recognised as follows:

Hedging transactions

Derivative financial instruments are used to hedge interest-rate risks and value fluctuations of equity securities in financial assets. The principles and hedge accounting are described in the Section ‘Use of derivative financial instruments / hedge accounting’.

The accrual method is applied to the derivative financial instruments used to hedge interest-rate risks as part of asset & liability management (ALM). The result from derivative hedging transactions is allocated to the same income item as income from the underlying transaction.

The result from macro hedges in the interest-rate hedging area, together with the interest income from currency swaps concluded in the banking book, is included in interest income or expenses under ‘Result from interest-rate hedging and other derivative transactions’.

During the tenor of the hedging transactions, for as long as they are deemed effective, the result of the hedging of equity securities in financial assets is booked on a lump-sum basis to a settlement account recognised under financial assets. After expiry or termination of the hedging, the cost prices of the hedged securities are adjusted by the total effective hedging result in proportion to the carrying amounts of the hedged securities. Hedging transactions that are ineffective or only partially effective are treated as trading transactions to the extent of the ineffective portion.

The replacement values of derivative hedging instruments are booked under ‘Other assets’ or ‘Other liabilities’ against the compensation account. Accrued interest on hedging positions is also included in the compensation account. The net balance of the compensation account from interest-rate hedges is reported under ‘Other assets’ or ‘Other liabilities’.

Interest-rate-risk hedges in the banking book are executed via the Trading & Treasury Services (Trading) organisational unit. Interest income from currency swaps concluded in the banking book is reported under ‘Result from interest-rate hedging and other derivative transactions’ under ‘Gross result from interest operations’. For this purpose, Trading concludes the corresponding derivative financial instruments with external counterparties. While the foreign-exchange result is allocated to trading activities, the interest income is recognised in the banking book (‘Gross result from interest operations’). These transactions are shown as trading instruments in Section 8.4 ‘Derivative financial instruments (assets and liabilities)’.

Trading business

The market value principle is applied to trading transactions, provided the contracts are listed on the stock exchange or a representative market exists. Unlisted derivative financial instruments are valued on a discounted-cash-flow basis or using option-pricing models. Realised and unrealised gains or losses from derivative financial instruments held for trading purposes are recognised under ‘Result from trading activities and the fair value option’, while positive or negative replacement values are recognised in the corresponding balance sheet item.

Commission business

In addition to derivative business for its own account as a proprietary trader, LUKB also engages in commission business with clients. The replacement values are accounted for according to the following rules:

• Over-the-counter (OTC) trading: All replacement values of derivative financial instruments are recognised in the balance sheet.
• Exchange traded: Only the replacement values of the derivative financial instruments sold by clients are recognised in the balance sheet (and the offsetting position as derivative financial instruments purchased on the stock exchange).

Other financial instruments at fair value and liabilities from other financial instruments at fair value

Financial instruments that are not part of the trading business but are nevertheless valued at fair value are recognised under ‘Other financial instruments at fair value’.

Self-issued structured products for which the fair value option has been selected within the meaning of Art. 18 para. 2 FINMA AO are treated as a unit and recognised under the balance sheet item ‘Liabilities from other financial instruments at fair value’.

With the exception of the valuation gain or loss on own shares in self-issued trackers, changes in valuation are recognised in ‘Result from trading activities and the fair value option’, while the interest expense is recognised under ‘Gross result from interest operations’. The gain or loss from the valuation of own shares in self-issued trackers is deferred over the tenor and, upon realisation, recognised in equity as per the Section ‘Own debt and equity securities’.

Financial investments

Securities acquired with the intention of long-term investment are valued in accordance with the lower-of-cost-or-market value principle. Debt securities acquired with the intention of holding to maturity are subject to the accrual method, i.e. any premium or discount is discounted or compounded over the tenor to maturity. In the event of an early sale or an early redemption, interest components are also accrued over the residual tenor of these securities in the same way. Any ratings-based value adjustments are recognised in the income item ‘Changes in value adjustments for default risk and losses from interest operations’. Physical precious metals held under financial assets to hedge holdings in the metal accounts of banks and clients are measured at fair value.

All debt securities in the form of convertible and warrant bonds, debt securities held with the intention of selling as well as all equity securities including investment funds are valued in accordance with the lower-of-cost-or-market principle, i.e. at the lower of acquisition cost or market price. Market-related value adjustments and hedging results are recognised under ‘Other ordinary income or expenses’. Any payments received as a result of nominal capital reductions on equity securities are used to reduce the acquisition costs and therefore are not recognised as income. Properties acquired through the lending business and intended for resale are valued in accordance with the lower-of-cost-or-market principle (acquisition cost or, where applicable, a conservatively estimated lower liquidation value). Any necessary adjustments in the value of financial assets valued under the lower-of-cost-or-market principle are recognised under ‘Other ordinary income or expenses’, with a maximum of one write-up up to the cost of acquisition.

For the treatment of own debt securities and equity securities, please refer to the corresponding Section ‘Own debt and equity securities’.

Non-consolidated participations

Significant non-controlling interests with holdings of 20 % to 50 % are recognised in the consolidated annual financial statements at proportionate equity on the balance sheet date in accordance with the equity method (see also the ‘Consolidation method’ section). Income from investments accounted for using the equity method is recognised in the income statement under ‘Income from participations accounted for using the equity method’, while negative value adjustments are charged to ‘Value adjustments on participations and depreciation and amortisation of tangible fixed assets and intangible assets’. Companies in which LUKB holds a stake of less than 20 % or the size of which does not have a material impact on the consolidated annual financial statements are carried at the lower of cost or market value. This category includes, in particular, investments in joint institutions of banks and in local institutions in the Canton of Lucerne.

Investments in smaller, local institutions are generally written down immediately to a nominal value of one Swiss franc. Value adjustments relating to this are recognised under ‘Value adjustments on participations and depreciation and amortisation of tangible fixed assets and intangible assets’. Realised gains and losses from the sale of investments are recognised under ‘Extraordinary income’ or ‘Extraordinary expenses’.

Non-consolidated participations are listed – where material – in the Section ‘Disclosures on significant participations’.

Tangible fixed assets – real estate

Bank buildings and other properties recognised under ‘Tangible fixed assets’ are carried at no more than acquisition cost less straight-line depreciation over their useful life down to a residual value. The respective estimated useful lives within the Group are as follows:

• Land: n/a, no depreciation
• Building or envelope: 33 years
• Interior fittings: 20 years
• Technical installations: 10 years

The residual value corresponds to the land value and a maximum supplement of 25 % of the investment amount in the building envelope. A potentially lower market value, measured individually for each property, always constitutes the upper limit for recognition in the balance sheet, i.e. additional depreciation is recognised down to the market value in this case. Where there are indications of impairment, a review is carried out at each balance sheet date to determine whether the value of the properties has been impaired.

IT software

One-off licences for IT software are capitalised under ‘Tangible fixed assets’ if the threshold of 100,000 Swiss francs is exceeded and the software is used for more than one accounting period. Depreciation is recognised on a straight-line basis over the conservatively estimated useful life from the actual commencement of operational use as follows:

• Core banking software: maximum 5 years
• Special software: maximum 3 years

Investment volumes of less than 5 million Swiss francs are usually written down immediately. If there are indications of impairment, the value in use must be assessed and, if necessary, an additional write-down is recognised.

Other tangible fixed assets

Other tangible fixed assets are capitalised if they are used for more than one accounting period and exceed the capitalisation threshold of 100,000 Swiss francs. Depreciation is recognised immediately or on a straight-line basis over the useful life. The respective estimated useful lives within the Group are as follows:

• Operating equipment incl. client safes: maximum 10 years
• Office furniture: maximum 5 years
• Office machines: maximum 4 years
• Telecommunications / workplace technology: maximum 4 years
• IT hardware: maximum 4 years
• Software integration costs: maximum 4 years

The effective depreciation period is defined at the start of each project. Ordinary depreciation is recognised on a straight-line basis over the fixed useful life. Investment volumes of less than 5 million Swiss francs are usually written down immediately. If there are indications of impairment, the value in use must be assessed and, if necessary, an additional write-down is recognised.

Write-ups are made when the reason for extraordinary depreciation ceases to exist. Realised gains and losses are recognised in the income statement under ‘Extraordinary income’ or ‘Extraordinary expenses’.

Intangible assets

For the treatment of any goodwill arising from the initial consolidation of a company, please see the Section ‘Consolidation method’. Other acquired intangible assets are capitalised if they provide a benefit over several accounting periods and exceed the capitalisation threshold of 100,000 Swiss francs. The effective depreciation period is defined at the time of initial capitalisation. Ordinary depreciation is recognised on a straight-line basis over the fixed useful life. If there are indications of impairment, the value in use must be assessed and, if necessary, an additional write-down is recognised. Realised gains and losses are recognised in the income statement under ‘Extraordinary income’ or ‘Extraordinary expenses’.

For the categories Tangible fixed assets – real estate, IT software, Other tangible fixed assets and Intangible assets, ordinary and extraordinary depreciation is recognised under ‘Value adjustments of participations and depreciation and amortisation of tangible fixed assets and intangible assets’.

LUKB had not capitalised any intangible assets as at 31 December 2025.

Provisions

Corresponding value adjustments and provisions are formed for all risks identified on the balance sheet date in accordance with the Section ‘General principles’. Provisions no longer required for business purposes are reversed through profit or loss. The creation and release of pension provisions are recognised under ‘Personnel expenses’, while other provisions are recognised under ‘Changes to provisions and other value adjustments and losses’. Provisions are recognised for inherent default risks on unimpaired contingent liabilities. The methods used for determining the corresponding provisions are described in Section 4 ‘Methods used for identifying default risks and determining the need for value adjustments and provisions’. For deferred taxes, please see the Section ‘Taxes’.

Pension obligations

The employees of the LUKB Group are insured with the pension fund of Luzerner Kantonalbank. A management insurance scheme (affiliation to a collective foundation) also exists. As at 31 December 2025, five employees were covered by this management insurance.

LUKB bears the employer's costs of occupational pension schemes for employees and their surviving dependants in accordance with statutory and regulatory provisions. All pension plans are defined contribution plans. The pension obligations and the assets serving as collateral are placed in legally independent foundations. Employer contributions from these pension plans are recognised in ‘Personnel expenses’ on an accrual basis.

Each year, an assessment is made for each pension plan as to whether, from the perspective of LUKB, a pension institution represents an economic benefit or an economic obligation. This economic benefit (under ‘Other assets’) or the economic obligation (under ‘Provisions’) of the individual pension plans are recognised in the balance sheet (however, an obligation only exists if the conditions for recognising a provision are met). The difference compared with the prior-period value is recognised in ‘Personnel expenses’. The annual financial statements of the pension institutions, which are prepared in accordance with Swiss GAAP FER 26, serve as the basis for determining the benefit or obligation. These present the financial situation as well as the existing surplus or deficit in accordance with the actual circumstances of the respective pension institution. Further information can be found in the ‘Provisions from pension obligations’ section below and Section 8.11 ‘Economic situation of own pension institutions’.

Provisions from pension obligations

For members of senior management promoted before 1986 and for members of the Executive Board promoted before 1990, an internal pension fund is maintained for fixed-salary components that were not insured by the pension fund. The benefits are based on the last insured salary before retirement and comprise old-age pensions and survivors' pensions. Instead of a pension benefit, the beneficiary was able to opt for a one-off lump-sum payment upon retirement.

This internal pension fund was discontinued in connection with the change in the pension plan of Luzerner Kantonalbank (a defined contribution plan has been in force since 1 January 2002). As at 31 December 2025, it still had five beneficiaries. In prior years, the necessary provisions for the beneficiaries' old-age and survivors' pensions were recognised in the income statement. Since 2010, no additional interest has been credited to the pension capital.

Reserves for general banking risks

The reserves for general banking risks are allocated to a separate account and counted as equity capital. They are disclosed accordingly in the ‘Consolidated statement of changes in equity’ section and in Section 8.14 ‘Value adjustments and provisions / reserves for general banking risks’.

Own debt and equity securities

Own bonds and cash bonds are offset against the corresponding items reported under liabilities. Interest income from own bonds and cash bonds is offset against interest expenses without affecting profit or loss. Own shares are deducted from equity at acquisition cost under ‘Own shares’. Own shares held for hedging purposes for self-issued trackers are also included in this balance sheet item. Any payments received from a nominal capital reduction for own shares are used to reduce the acquisition costs. Dividend payments and gains from disposals are allocated to the ‘Capital reserve’.

Participation programmes

Part of the variable compensation of the Executive Board and senior management is paid out via a share participation programme. In addition, the Bank may periodically grant all employees the right to acquire a limited number of employee shares. Expenses resulting from the participation programmes are based on valuations at market prices without taking into account any deduction for vesting periods and are included in ‘Personnel expenses’. Further information on the structure of the programmes can be found in the Compensation Report.

Contingent liabilities, irrevocable commitments, liabilities for calls on shares and other equity, credit commitments

Off-balance-sheet transactions are disclosed at nominal value. Provisions are recognised in the balance sheet for foreseeable risks. Regarding the methodology used to determine these provisions, see Section 4 ‘Methods used for identifying default risks and determining the need for value adjustments and provisions’.

Securities and fiduciary investments

Securities and uncertificated securities, coins and precious metals, exchange-traded derivative financial instruments and structured products as well as cryptocurrencies in open client custody accounts are included under this item. Cryptocurrencies are assigned to a collective pool in accordance with Art. 16 para. 1^bis letter b of the Swiss Banking Act and it can be seen which share of the collective assets is attributable to each custody-account client. Cryptocurrencies can therefore be segregated in the event of the bank's bankruptcy. Fiduciary transactions are investments or loans executed or granted by Group companies in their own name but for the account and risk of the client.

Taxes

Tax expenses comprise current and deferred taxes. Current taxes are determined in accordance with the relevant tax laws and are charged to the income statement in the reporting period in which the respective profits arise. Deferred tax assets and liabilities are calculated for temporal differences between the carrying amounts of assets and liabilities recognised in the ‘Consolidated balance sheet’ and the carrying amounts recognised by the tax authorities. These are determined separately for each business period and for each taxable entity. Deferred tax assets are only recognised if they can be realised in the short term. Changes in deferred taxes are recognised in the income statement and disclosed in Section 10.12 ‘Taxes and tax rate’. Both the current income and capital tax expenses and the change in deferred taxes within ‘Provisions’ are recognised under ‘Taxes’.

Changes in accounting and valuation principles

In the 2025 financial year, LUKB made the following changes to its accounting and valuation principles:

• From the 2025 financial year onwards, provisions for inherent default risks on off-balance-sheet items (contingent liabilities) are now recognised. For further details, see Section 4 ‘Methods used for identifying default risks and determining the need for value adjustments and provisions’
• Positive and negative replacement values of derivative financial instruments and cash collaterals for each counterparty deposited in this context are now also offset against each other in the balance sheet, provided that recognised and legally enforceable netting agreements exist. The previous year's figures have been restated as follows for comparison purposes:

• From the 2025 financial year onwards, brokerage commissions for loans paid to brokers and platforms are no longer recognised in the commission and service business, but rather are offset directly against the corresponding interest income. In the 2024 financial year, the corresponding commission expenses amounted to 1.0 million Swiss francs.
• In addition, the dedicated reserves for general banking risks were combined with the reserves for general banking risks not intended for a specific purpose as at 31 December 2025. Accordingly, the total amount of the reserves for general banking risks is now without purpose-specific allocation.

Recognition of transactions

All transactions concluded are recognised on the trade date and valued in accordance with the provisions in the Sections ‘Foreign-currency translation’ and ‘Detailed provisions’. Accordingly, the net income is also included in the income statement from the trade date onwards. Derivative financial instruments (with the exception of transactions settled via the continuous linked settlement system [CLS]) are derecognised two days before maturity on accounts opened in the name of the counterparty. CLS-eligible foreign exchange transactions are derecognised on the settlement date.

Treatment of past due interest

Unpaid interest and commissions overdue by more than 90 days are not included in ‘Interest and discount income’ but allocated directly to value adjustments. Likewise, the accrued interest on these items is not included in ‘Gross result from interest operations’. In addition, loans are placed interest-free if it appears unlikely that the interest can be collected.

Foreign-currency translation

Receivables and liabilities in foreign currencies and precious metals as well as foreign currency holdings for the foreign exchange business are valued in the individual financial statements of the Group companies at the average exchange rates applicable on the balance sheet date and applied uniformly throughout the Group. The exchange-rate gains and losses resulting from this valuation practice are reported under ‘Result from trading activities and the fair value option’. Transactions in foreign currencies are translated at the prevailing exchange rate and any resulting gains and losses are recognised in the income statement. The exchange rates applied uniformly across the LUKB Group as at the reporting date were:

Refinancing of positions in trading business

Interest and dividend income from trading activities is disclosed under ‘Result from trading activities and the fair value option’. By contrast, the refinancing result for trading activities (funding), which is calculated on the basis of the tom/next interest rate, is recognised under ‘Result from trading activities and the fair value option’ and under ‘Refinancing result from trading positions’ within ‘Interest and discount income’.