(1) Credit institutions are to value participating interests including the participating interests held in affiliated enterprises, concessions, industrial property rights and similar rights and assets as well as licenses to such rights and assets, real property and equivalent rights as well as buildings, including buildings on third-party real estate, plant and machinery, other equipment, factory equipment and furnishings and fixtures as well as construction in progress in accordance with the provisions applying to such fixed assets unless they are not intended to serve business operations on a permanent basis; in such event, they are to be valued pursuant to sentence 2. Other assets, particularly receivables and investment securities, are to be valued in accordance with the provisions applying to the current assets, unless they are intended to serve business operations on a permanent basis; in such event, they are to be valued pursuant to sentence 1. Section 253 (3) sentence 6 is to be applied solely to participating interests and participating interests held in affiliated enterprises within the meaning of sentence 1 as well as to investment securities and receivables within the meaning of sentence 2, that are intended to serve business operations on a permanent basis.
(2) In derogation from section 253 (1) sentence 1, mortgage loans and other receivables may be recognised at their nominal amount insofar as the difference between the nominal amount and the amount paid out or the cost of acquisition is similar in nature to interest. Where the nominal amount exceeds the amount paid out or the cost of acquisition, the difference is to be shown in the accrued and deferred items reported under liabilities; it is to be reversed as scheduled and its respective amount is to be stated separately on the balance sheet or in the notes. Where the nominal amount is lower than the amount paid out or lower than the cost of acquisition, the difference may be included in the accrued and deferred items reported under assets; it is to be reversed as scheduled and its respective amount is to be stated separately on the balance sheet or in the notes.
(3) Financial instruments in the trading portfolio are to be valued at their fair value minus a deduction for risk. Performing a reclassification into the trading portfolio is impermissible. The same applies to performing a reclassification out of the trading portfolio unless exceptional circumstances, in particular grave impairments of the financial instruments’ marketability, lead the credit institution to give up its trading intent. Financial instruments in the trading portfolio subsequently may be included in a combined item for valuation purposes; once the combined item for valuation purposes no longer exists, they are to be reclassified back into the trading portfolio.
(4) In each financial year, an amount is to be allocated to the special item “Fund for general banking risks” pursuant to section 340g on the balance sheet, which amount must correspond to no less than 10 per cent of the net earnings of the trading portfolio and is to be shown separately therein. This item may be reversed only
1. in order to balance out net expenditures of the trading portfolio, as well as
2. in order to balance out a net loss for the year, unless the loss is covered by accumulated profits carried forward from the preceding financial year,
3. in order to balance out accumulated losses carried forward from the preceding financial year, unless the losses are covered by net income for the year, or
4. insofar as it exceeds 50 per cent of the average of the net earnings generated by the trading portfolio over the past five years.
Reversals made pursuant to sentence 2 are to be stated in the notes and an explanation is to be provided.