New accounting rule pushes Deutsche Bank into profit

Taking advantage of new accounting rules has shifted Deutsche Bank into a
profit instead of a loss.

The bank reclassified 25bn Euros (£19.7bn) of assets as loans it will hold
until maturity. The shift allowed it to avoid 845m Euros of writedowns on some
of its assets.

Avoiding the writedown helped raise net income by 536m Euros and led to it
posting a quarterly net income of 414m euros.

The new accounting provisions allowed the bank to have a ‘more proper
treatment’ of its assets, said its CFO Stefan Krause, reported

It had previously classified some assets as ‘trading’, which meant they were
valued at market price through the profit and loss account. The assets are now
described as ‘available for sale’, which is still at market value but the price
movements are held on the balance sheet.

The provision is an easing of the controversial fair value mark-to-market

On Wednesday Schroders reclassified
some of its assets, avoiding a £50m to its quarterly profits.

Further reading:

Asset reclassification helps
Schroders avoid £49.9m loss

IASB confirms new reclassification

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