1. ANNUAL REPORT 2000/2001 PART V
CONSOLIDATED FINANCIAL STATEMENTS

2. PART I
2 Financial highlights 2000
4 To our shareholders
PART II
6 An overview of Credit Suisse Group
6 Organisation
8 Financial review
11 Strategic review
PART III
13 Review of business units
16 Credit Suisse Financial Services
23 Credit Suisse Private Banking
25 Credit Suisse Asset Management
27 Credit Suisse First Boston
PART IV
30 Credit Suisse Group Risk Management
PART V
50 Consolidated financial statements
PART VI
107 Parent company financial statements
118 Five-year summary of selected
financial data
120 Management
126 Main offices
127 Information for investors

3. CONSOLIDATED FINANCIAL STATEMENTS
Page
Comments to the financial statements 52
Financial statements 54
Consolidated income statement 54
Consolidated balance sheet 55
Consolidated statement of source and application of funds 56
Consolidated off-balance sheet business 57
Notes to the consolidated financial statements 59
1 Summary of significant accounting policies 59
2 Changes to accounting policies 66
3 Business combinations 70
4 Subsequent events 70
Income statement
5 Split of income statement into the banking and insurance business 71
6 Income statement by origin 72
7 Analysis of extraordinary income 72
8 Analysis of extraordinary expenses 72
9 Income statement of the banking business 73
10 Analysis of net interest income 74
11 Analysis of net trading income 74
12 Analysis of valuation adjustments, provisions and losses from the banking business 74
13 Income statement of the insurance business 75
14 Analysis of insurance premiums by region 76
15 Analysis of net investment income from the insurance business 77
Balance sheet: Assets
16 Money market papers 78
17 Due from customers from lease financing 78
18 Loans (due from customers, mortgages) by economic sector 78
19 Analysis of loan collateral 79
20 Securities and precious metals trading portfolios 79
21 Own shares included in securities trading portfolios 80
22 Financial investments from the banking business 80
23 Investments from the insurance business 81
24 Own shares included in financial investments from the banking 82
and insurance business
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4. Page
25 Non-consolidated participations 82
26 Analysis of capital assets 82
27 Additional information on fixed assets 82
28 Analysis of other assets 82
29 Analysis of assets by country and country groups 83
30 Assets pledged or assigned and assets subject to ownership reservation 83
Balance sheet: Liabilities and shareholders’ equity
31 Liabilities for own pension funds 83
32 List of bonds issued 84
33 Analysis of other liabilities 92
34 Valuation adjustments and provisions/reserve for general banking risks 92
35 Technical provisions for the insurance business 93
36 Statement of shareholders’ equity 94
Other information
37 Loans to members of the bank’s governing bodies 94
38 Maturity structure of current assets, financial investments and borrowed funds 95
39 Securities lending and borrowing and repurchase agreements 95
40 Balance sheet by origin 96
41 Balance sheet by currencies 97
42 List of principal participations 98
43 Foreign currency translation rates 103
44 Employee equity participation plans 104
Report of the Group’s auditors 106
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5. CONSOLIDATED FINANCIAL STATEMENTS
Comments to financial statements
Credit Suisse Group’s Annual Report contains the consolidated financial state-
ments of Credit Suisse Group for the financial year ended 31 December 2000
and the annual financial statements of Credit Suisse Group parent company for
the financial year ended 31 March 2001. Both financial statements have been
examined by independent auditors. Their reports are presented on pages 106
and 115.
The consolidated financial statements include Credit Suisse First Boston,
Credit Suisse, Winterthur, the private banks, Neue Aargauer Bank, and the
financial subsidiaries of Credit Suisse Group in Guernsey.
The Group’s financial statements are prepared in accordance with the
accounting rules of the Implementing Ordinance of the Swiss Federal Law on
Banks and Savings Banks, the Federal Banking Commission guidelines and the
provisions of the Swiss Accounting and Reporting Recommendations with
respect to insurance companies. Significant information about insurance opera-
tions is shown separately in the balance sheet and income statement.
The financial year 2000
Within the framework of the Swiss Accounting and Reporting Recommendations,
Credit Suisse Group has changed its accounting policies in the year 2000 in
order to increase the transparency for its insurance business and to align with a
more internationally-recognised standard. The Group’s financial statements as
of 31 December 1999 have also been restated to conform with the current year’s
presentation. In the tables of this publication, 1999 results will be shown in
“previously reported” as well as in “new basis” columns.
In August 2000 Credit Suisse Group announced the acquisition of Donaldson,
Lufkin & Jenrette, Inc. (DLJ). DLJ was merged into and became a wholly-owned
subsidiary of Credit Suisse First Boston (USA), Inc., an indirect wholly-owned
subsidiary of Credit Suisse Group. The results of DLJ operations commencing
3 November 2000 have been included in the consolidated financial statements.
In April 2000, Winterthur Life & Pensions completed its acquisition of Nicos
Life. The acquisition is reflected in the consolidated financial statements as of 1
April 2000. Subsequent to the acquisition, Nicos Life changed its name to CS
Life Japan.
In April 2000, Winterthur Insurance completed its acquisition of National
Insurance and Guarantee Corporation Plc (NIG), London. The results of opera-
tions of NIG are reflected in the consolidated financial statements commencing
1 April 2000.
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6. In July 2000, Winterthur Life & Pension completed its acquisition of Colonial
UK, the British subsidiary of the Australian Colonial Group. The results of opera-
tions of Colonial UK commencing 1 July 2000 are included in the consolidated
financial statements.
For the acquisition of Donaldson, Lufkin & Jenrette, a restructuring provision
of CHF 1,499 m before tax (CHF 1,074 m after tax) was included in 2000, of
which CHF 645 m were used in the same year. The resulting end balance is
CHF 854 m.
Provisions for technology and restructuring costs for the Focus project and
BZW declined by CHF 130 m, from CHF 169 m at the beginning of the year to
CHF 39 m at the end.
Subsequent events
Credit Suisse Private Banking announced the acquisition of the UK investment
manager JO Hambro Investment Management Limited. JO Hambro will be
consolidated in the accounts when regulatory approval is obtained.
In December 2000, Winterthur Life & Pension announced the acquisition of
the largest Czech pension fund, VOPF (Vojensky Otevreny Penzijni Fond).
In February 2001, Winterthur Insurance announced the sale of its large
multinational corporates insurance business Winterthur International to the
Bermuda-based financial services group XL Capital Ltd. The transaction is
expected to close in the first half of 2001.
www.credit-suisse.com 53

7. CONSOLIDATED FINANCIAL STATEMENTS
Previously Change to
New basis reported Change to previously
2000 1999 1999 new basis reported
Income statement Notes in CHF m in CHF m in CHF m in % in %
19,380 1) 2)
30,181 19,380 56 56
Interest and discount income 10
5,865 4,127 4,127 42 42
Interest and dividend income from trading portfolios 10
471 2)
706 471 50 50
Interest and dividend income from financial investments 10
(18,726) 1)
(31,439) (18,640) 69 68
Interest expenses 10
5,313 5,338 5,252 0 1
Net interest income 5, 6
717 594 594 21 21
Commission income from lending activities
16,039 10,504 10,523 53 52
Commissions from securities and investment transactions
669 393 393 70 70
Commissions from other services
(829) (635) (640) 31 30
Commission expenses
16,596 10,856 10,870 53 53
Net commission and service fee income 5, 6
8,791 6,578 6,578 34 34
Net trading income 5, 6, 11
28,690 26,146 26,203 10 9
Premiums earned, net
(28,900) (26,893) (27,120) 7 7
Claims incurred and actuarial provisions
(2,113) (1,743) (2,157) 21 (2)
Commission expenses, net
8,489 6,656 8,134 28 4
Investment income from the insurance business
6,166 4,166 5,060 48 22
Net income from the insurance business 5, 6, 13, 14
1,023 505 505 103 103
Income from the sale of financial investments
217 90 124 141 75
Income from investment activities
199 78 95 155 109
– of which from participations valued according to the equity method
18 12 29 50 (38)
– of which from other non-consolidated participations
140 24 33 483 324
Real estate income
1,243 574 703 117 77
Sundry ordinary income
(2,258) (1,487) (1,255) 52 80
Sundry ordinary expenses
365 (294) 110 (224) 232
Other ordinary income/(expenses), net 5, 6
37,231 26,644 27,870 40 34
Operating income
18,503 13,554 13,509 37 37
Personnel expenses 5, 6
6,645 5,227 5,229 27 27
Other operating expenses 5, 6
25,148 18,781 18,738 34 34
Operating expenses
12,083 7,863 9,132 54 32
Gross operating profit
1,510 981 937 54 61
Depreciation and write-offs of non-current assets 5
246 110 108 124 128
Amortisation of goodwill 5
Valuation adjustments, provisions and losses
1,265 1,540 1,540 (18) (18)
from the banking business 5, 12
3,021 2,631 2,585 15 17
Depreciation, valuation adjustments, losses
9,062 5,232 6,547 73 38
Profit before extraordinary items, taxes and minority interests
105 93 93 13 13
Extraordinary income 5, 7
(1,796) (152) (152) – –
Extraordinary expenses 5, 8
(1,349) (855) (1,149) 58 17
Taxes 5
6,022 4,318 5,339 39 13
Net profit before minority interests
(237) (68) (118) 249 101
Minority interests 5
5,785 4,250 5,221 36 11
Net profit
1)
Interest income and expenses have each been restated by CHF 2,242 m to be consistent with the current year’s presentation.
2)
CHF 185 m have been reclassified from interest and dividend income from financial investments to interest and discount income to be consistent with the current year.
54

8. Previously Change to
New basis reported Change to previously
31 Dec. 2000 31 Dec. 1999 31 Dec. 1999 new basis reported
Balance sheet Notes in CHF m in CHF m in CHF m in % in %
Assets
2,928 3,141 3,141 (7) (7)
Cash and other liquid assets 38
30,127 28,994 28,994 4 4
Money market papers 16, 38
243,692 164,883 164,901 48 48
Due from banks 38
9,871 7,152 6,457 38 53
Receivables from the insurance business 38
145,257 104,931 104,931 38 38
Due from customers 18, 19, 38
92,432 77,763 86,553 19 7
Mortgages 18, 19, 38
198,917 126,746 126,746 57 57
Securities and precious metals trading portfolios 20, 21, 38
25,574 18,828 18,828 36 36
Financial investments from the banking business 22, 24, 38
132,632 117,771 117,222 13 13
Investments from the insurance business 23, 24
1,829 1,789 1,823 2 0
Non-consolidated participations 25, 26
9,913 9,011 6,828 10 45
Tangible fixed assets 26, 27
23,299 4,737 2,990 392 679
Intangible assets 26
16,294 11,814 9,023 38 81
Accrued income and prepaid expenses
54,668 51,462 44,309 6 23
Other assets 28
987,433 729,022 722,746 35 37
Total assets 29, 40, 41
4,876 1,792 1,792 172 172
Total subordinated assets
771 928 928 (17) (17)
Total receivables due from non-consolidated participations
Liabilities and shareholders’ equity
23,176 22,120 22,120 5 5
Money market papers issued 38
359,441 198,843 198,324 81 81
Due to banks 38
8,807 6,355 6,268 39 41
Payables from the insurance business 38
39,233 44,007 44,007 (11) (11)
Due to customers in savings and investment deposits 38
213,549 182,082 182,249 17 17
Due to customers, other 38
3,225 3,884 3,885 (17) (17)
Medium-term notes (cash bonds) 38
65,524 46,669 47,905 40 37
Bonds and mortgage-backed bonds 32, 38
28,021 14,952 14,916 87 88
Accrued expenses and deferred income
57,653 51,227 52,577 13 10
Other liabilities 33
13,107 14,219 8,566 (8) 53
Valuation adjustments and provisions 34
132,175 113,981 107,561 16 23
Technical provisions for the insurance business 35
943,911 698,339 688,378 35 37
Total liabilities
2,319 2,131 2,131 9 9
Reserve for general banking risks 34, 36
6,009 5,444 5,444 10 10
Share capital 36
19,882 11,700 11,696 70 70
Capital reserve 36
4,789 5,515 6,977 (13) (31)
Revaluation reserves for the insurance business 36
600 600 600 0 0
Reserve for own shares 36
1,567 (111) 552 – 184
Retained earnings 36
2,571 1,154 1,747 123 47
Minority interests 36
5,785 4,250 5,221 36 11
Net profit 36
43,522 30,683 34,368 42 27
Total shareholders’ equity
987,433 729,022 722,746 35 37
Total liabilities and shareholders’ equity 40, 41
21,801 17,898 18,194 22 20
Total subordinated liabilities
779 749 749 4 4
Total liabilities due to non-consolidated participations
www.credit-suisse.com 55

9. CONSOLIDATED FINANCIAL STATEMENTS
New basis
2000 1999
Net Net
Statement of source and Source Application in/(out) flow Source Application in/(out) flow
application of funds Notes in CHF m in CHF m in CHF m in CHF m in CHF m in CHF m
From operations,
1,669 9,026
equity transactions and investments
20,577 10,981
Operating activities
6,022 4,318
Net profit before minority interests
2,736 1,423
Provisions for credit and other risks
144 78
Losses 12
1,349 855
Provisions for taxes
1,756 1,091
Depreciation and write-offs 26
10 32
Extraordinary income 7
190 101
Extraordinary expenses 8
Participations valued according
199 78
to the equity method
4,480 673
Accrued income and prepaid expenses
13,069 2,552
Accrued expenses and deferred income
6,634 (274)
Equity transactions
565 62
Share capital
7,478 225
Capital surplus and retained earnings
1,986 1,430
Dividends paid 36
703 1,318
Foreign exchange impact 36
1,280 449
Minority interests
(21,060) (5,315)
Investments in long-term assets
145 463
Investments in companies
186 267
Real estate
21,391 4,585
Other tangible fixed and intangible assets
(4,482) 3,634
Financial investments, provisions, other assets and liabilities
6,746 1,361
Investments from the banking business
14,861 7,575
Investments from the insurance business
3,941 591
Valuation adjustments and provisions
Technical provisions for the insurance business 1) 18,194 11,213
3,554 7,072
Other assets
6,426 5,124
Other liabilities
70,289 16,018
From other balance sheet items
(138,706) (34,418)
Assets
1,133 2,401
Money market papers
78,756 24,647
Due from banks
2,719 1,042
Receivables from the insurance business
40,402 2,323
Due from customers
15,696 6,089
Mortgages
208,995 50,436
Liabilities
1,056 7,385
Money market papers issued
160,598 44,494
Due to banks
2,452 2,109
Payables from the insurance business
4,774 2,611
Due to customers in savings and investment deposits
31,467 3,521
Due to customers, other
18,196 244
Bonds and medium-term notes
71,958 25,044
Change in liquid assets
72,171 24,231
Securities and precious metals trading portfolios 20
213 813
Cash and other liquid assets
1)
In line with insurance practice, the change in the technical provisions is shown as a total amount under changes in provisions affecting the cash flow.
56

10. 31 Dec. 2000 31 Dec. 1999 Change Change
Off-balance sheet business in CHF m in CHF m in CHF m in %
Contingent liabilities
Credit guarantees in form of avals, guarantees
7,013 6,755 258 4
and indemnity liabilities
Bid bonds, delivery and performance bonds,
4,824 5,262 (438) (8)
letters of indemnity, other performance-related guarantees
3,142 3,224 (82) (3)
Irrevocable commitments in respect of documentary credits
5,026 3,870 1,156 30
Other contingent liabilities
20,005 19,111 894 5
Total contingent liabilities
126,998 120,560 6,438 5
Irrevocable commitments
305 50 255 510
Liabilities for calls on shares and other equity instruments
150 226 (76) (34)
Confirmed credits
41,974 37,371 4,603 12
Fiduciary transactions
Mortgage Other Without
collateral collateral collateral Total
Analysis of collateral as of 31 December 2000 in CHF m in CHF m in CHF m in CHF m
Contingent liabilities
Credit guarantees in form of avals, guarantees
36 4,607 2,370 7,013
and indemnity liabilities
Bid bonds, delivery and performance bonds,
136 1,926 2,762 4,824
letters of indemnity, other performance-related guarantees
0 1,330 1,812 3,142
Irrevocable commitments in respect of documentary credits
107 1,260 3,659 5,026
Other contingent liabilities
279 9,123 10,603 20,005
Total contingent liabilities
352 9,878 8,881 19,111
As of 31 December 1999
7,095 76,169 43,734 126,998
Irrevocable commitments
2,630 56,553 61,377 120,560
As of 31 December 1999
0 0 305 305
Liabilities for calls on shares and other equity instruments
0 0 50 50
As of 31 December 1999
0 14 136 150
Confirmed credits
0 1 225 226
As of 31 December 1999
www.credit-suisse.com 57

11. CONSOLIDATED FINANCIAL STATEMENTS
New basis New basis
31 Dec. 2000 31 Dec. 2000 New basis 31 Dec. 1999 31 Dec. 1999
Positive gross Negative gross 31 Dec. 1999 Positive gross
31 Dec. 2000 Negative gross
replacement replacement Nominal replacement
Nominal replacement
Off-balance sheet business value 4) value 4) value value
value value
Derivative instruments in CHF bn in CHF bn in CHF bn in CHF bn
in CHF bn in CHF bn
Interest rate products
0.1 0.1 305.3 0.3
Forward rate agreements 109.0 0.3
55.0 54.4 3,353.7 52.7
Swaps 3,674.8 50.0
10.2 10.7 1,185.5 8.6
Options bought and sold (OTC) 886.9 9.1
1.1 1.1 45.3 0.5
Forwards 268.8 0.5
– – 542.5 –
Futures 466.9 –
– – 349.2 –
Options bought and sold (traded) 386.9 –
66.4 66.3 5,781.5 62.1
Total interest rate products 5,793.3 59.9
Foreign exchange products
Forwards 1) 11.5 12.2 521.0 10.5
558.0 9.4
Swaps 2) 15.1 16.1 267.1 10.9
305.9 14.9
3.8 3.8 280.6 3.9
Options bought and sold (OTC) 273.4 3.7
– – 0.5 –
Futures 1.7 –
– – 0.1 –
Options bought and sold (traded) 0.4 –
30.4 32.1 1,069.3 25.3
Total foreign exchange products 1,139.4 28.0
Precious metals products
Forwards 1) 0.8 0.7 17.5 1.5
18.5 1.2
0.7 1.3 11.2 0.6
Options bought and sold (OTC) 16.1 0.7
– – 0.1 –
Futures 0.1 –
– – 0.0 –
Options bought and sold (traded) 0.1 –
1.5 2.0 28.8 2.1
Total precious metals products 34.8 1.9
Equity/index-related products
1.9 2.6 27.0 2.5
Forwards 22.6 2.9
13.3 15.5 294.3 20.1
Options bought and sold (OTC) 265.8 21.2
– – 35.7 –
Futures 44.6 –
– – 81.8 –
Options bought and sold (traded) 140.9 –
15.2 18.1 438.8 22.6
Total equity/index-related products 473.9 24.1
Other products
2.1 2.7 8.7 0.5
Forwards 69.8 0.4
0.6 0.6 8.7 0.3
Options bought and sold (OTC) 6.4 0.3
– – 7.8 –
Futures 2.4 –
– – 0.1 –
Options bought and sold (traded) 1.8 –
2.7 3.3 25.3 0.8
Total other products 80.4 0.7
116.2 121.8 7,343.7 112.9
Total derivative instruments 7,521.8 114.6
Total replacement values
43.0 3) 5) 48.8 5) 37.2 3) 5) 40.3 5)
according to the balance sheet
1)
Including outstanding spot transactions.
2)
Cross-currency interest rate swaps.
3)
Positive replacement value after deduction of CHF 0.1 bn (1999: CHF 1.4 bn) of assets pledged as security.
4)
No replacement values are shown for traded derivatives (futures and traded options) subject to daily margining requirements. Total positive and negative replacement
values on traded derivatives amount to CHF 2.1 bn (1999: CHF 1.4 bn) and CHF 1.5 bn (1999: CHF 1.1 bn), respectively.
5)
Of which from the insurance business: positive replacement values CHF 0.1 bn (1999: CHF 0.2 bn), negative replacement values CHF 0.2 bn (1999: CHF 0.3 bn).
58

12. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Summary of significant accounting policies
Basis for accounting
The Credit Suisse Group’s consolidated financial statements are prepared in
accordance with the accounting rules of the Implementing Ordinance of the
Swiss Federal Law on Banks and Savings Banks, the Federal Banking
Commission guidelines and the provisions of the Swiss Accounting and Reporting
Recommendations with respect to insurance companies. The consolidation and
valuation policies of the Group reflect the accounting principles set out in the
Swiss stock exchange listing regulations. The financial year for the Group ends
on 31 December. In preparing the consolidated financial statements, manage-
ment is required to make best estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Consolidation
The consolidated financial statements include the accounts of Credit Suisse
Group and its subsidiaries. The Group consolidates subsidiaries in which it holds,
directly or indirectly, more than 50% of the voting rights of an entity or where it
has the ability to exercise control over an entity. The effects of intra-group trans-
actions are eliminated in preparing the consolidated financial statements. Minority
interests in shareholders’ equity and net profit are disclosed separately.
The Group accounts for participations in which it owns 20% to 50% of the
voting rights and/or has the ability to exercise significant influence using the
equity method of accounting. The Group’s profit or loss share is included in
Other ordinary income. Certain majority owned participations which operate out-
side of the Group’s core business are accounted for according to the equity
method.
Foreign currency translation
For the purpose of consolidation, the balance sheets of foreign Group companies
are translated into Swiss francs using the year-end exchange rate, and their
income statements are translated using the average exchange rate prevailing
throughout the year (see Note 43). Translation adjustments arising on consolida-
tion are recorded directly in shareholders’ equity.
In the annual accounts of the individual Group companies, assets, liabilities
and off-balance sheet items denominated in foreign currencies are translated into
the relevant reporting currency using the year-end exchange rate. Income and
expense items denominated in foreign currencies are translated into the reporting
currency using the exchange rate as of the transaction date. Resulting exchange
differences are included in the consolidated income statement, except for differ-
ences relating to debt and equity securities held for investment by the insurance
entities which are recorded in shareholders’ equity.
Offsetting
In the insurance business, assets and liabilities are offset when the Group has a
legal right to offset amounts with the same counterparty and transactions are
expected to be settled on a net basis. In the banking units, assets and liabilities
are offset when the following conditions are cumulatively met. Receivables and
payables arise from transactions of similar nature, with the same counterparty,
with the same or earlier maturity and in the same currency and which cannot
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13. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
lead to a counterparty risk. Positive and negative replacement values are offset
with the same counterparty in so far as bilateral agreements exist that are recog-
nised and enforceable by law.
Trade date/settlement date accounting
Foreign exchange, money market and precious metals transactions are recorded
on settlement (value) date. Prior to the value date, foreign exchange and precious
metals transactions are recorded as off-balance sheet business and reported with
their replacement values. Proprietary securities transactions and customer securi-
ties transactions are generally recorded on a trade date basis.
Cash, due from banks and money market papers
Cash and due from banks are accounted for at nominal value. Money market
instruments held for trading are carried at fair value. Money market instruments
not held for trading or for sale are recorded net of unamortised premiums/
discounts. The necessary provisions for recognisable risks and potential losses
are normally deducted from the appropriate asset items in the balance sheet.
Due from customers and mortgages (loans)
Loans are initially recorded at nominal value. Loans held-to-maturity are recorded
net of unamortised premiums/discounts. Loans held for sale are recorded at
lower of cost or market value. Interest income is accrued as earned.
Loans are carried at nominal value net of any provisions for impairment. The
Group provides for credit losses based on regular and detailed analysis on each
loan in the portfolio considering collateral and counterparty risk. If uncertainty
exists as to the repayment of either principal or interest, a provision is either pro-
vided or adjusted accordingly. Charge-off of a loan occurs when the Group is
certain that there is no possibility to recover the principal.
The Group considers a loan impaired when it believes it will be unable to col-
lect all principal and/or interest in accordance with the contractual terms of the
loan agreement. A loan is classified as non-performing when the contractual pay-
ments of principal and/or interest are in arrears for 90 days or more. Interest
collected on non-performing loans is accounted for using the cash basis, cost re-
covery method or a combination of both, as appropriate. Generally, an impaired
loan may be restored to performing status when all delinquent principal and
interest are brought current in accordance with the terms of the loan agreement
and certain performance criteria are met.
Securities and precious metals trading portfolios
Debt and equity securities and precious metals held in the trading portfolio are
carried at fair value.
Fair value is determined using quoted market prices, where a price-efficient
and liquid market exists. In the absence of such a market, the fair value is estab-
lished on the basis of a valuation model. Unrealised and realised gains and losses
on these positions are recognised in Net trading income. Interest and dividend
income from the trading portfolio is recorded in Net interest income. Where fair
values cannot be determined, the positions are reported at lower of cost or mar-
ket value or estimated net realisable value.
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14. Financial investments from the banking business
This position includes securities, private equity investments, real estate held for
sale as well as debt securities held until maturity. Companies acquired and held
for subsequent disposal are also included in Financial investments.
Debt and equity securities and real estate held for sale are valued at lower of
cost or market. Unrealised losses are recorded in the income statement when
the market value is lower than the cost. When the market value increases, un-
realised gains are recorded only to the extent losses were previously recognised.
Losses due to impairment in creditworthiness are recorded in Valuation adjust-
ments, provision and losses.
Debt securities held-to-maturity are carried at amortised cost (accrual method).
Premiums and discounts are accrued or deferred over the term of the instrument
until final maturity. Realised profits or losses which are interest-related and which
arise from the early disposal or redemption of the instrument are accrued or
deferred over the remaining term of the instrument sold. Other than temporary
impairment is recorded in Valuation adjustments, provisions and losses.
Derivative instruments – banking business
Positive and negative replacement values of all derivative instruments are report-
ed in Other assets and Other liabilities, respectively.
Trading derivative instruments are carried at fair value as positive and negative
replacement values. The replacement values are presented net by counterparty
for transactions in those products where the Group has a legal right to set off;
otherwise the replacement values are presented gross by contract. Realised and
unrealised gains and losses are included in Net trading income. The majority of
the Group’s derivative positions are trading related.
The Group uses derivatives to manage interest rate, foreign currency, equity
market, and credit risks. Gains and losses on hedging derivative instruments are
recognised in income on the same basis as the underlying exposure. Strategic
positions are valued at lower of cost or market. Derivative instruments used
for interest rate risk management are valued according to the accrual method.
The interest component is accrued or deferred over the term of the instrument
according to the annuity method. Realised profits or losses which are interest-
related and which arise from the early disposal or redemption of the instrument
are also accrued or deferred over the remaining term of the instrument.
Gains and losses related to qualifying hedges of firm commitments and prob-
able anticipated transactions are deferred and recognised in income or as adjust-
ments to carrying amounts when the hedged transactions occur.
Investments from the insurance business
Debt and equity securities held for investment are carried at fair value. Unrealised
gains and losses including foreign exchange gains and losses are recorded as
a separate component of shareholders’ equity, net of deferred taxes. Realised
gains and losses on securities are determined using the specific identification
method. Realised gains and losses, the amortisation of premiums and discounts
relating to debt securities and write-offs due to other than temporary impairment
are included in Investment income from the insurance business.
Certain debt and equity securities are held as trading and carried at fair value.
Gains and losses from the valuation of the trading portfolio and realised gains
and losses on these positions are included in Investment income from the insur-
ance business. Debt securities held-to-maturity are carried at amortised cost.
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15. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Non-marketable securities are valued at cost. Other than temporary impairment
is recorded in Investment income from the insurance business.
Real estate held for investment, including capital improvements, is carried at
cost less accumulated depreciation over its estimated useful life, generally 40 to
67 years. No depreciation is charged on land. Valuation adjustments are record-
ed for any impairment. Depreciation and write-downs are included in Investment
income from the insurance business.
Investments for the benefit of life insurance policyholders who bear the
investment risk are carried at fair value.
Loans, mortgages and short-term investments are accounted for at nominal
value, net of necessary provisions. The provision for credit losses is determined in
substantially the same way as the banking business. The provision for credit loss-
es is recorded in Investment income from the insurance business.
Derivative instruments are generally used to hedge the exposure to changes
in the fair value of investments. Hedging transactions are accounted for using
the same methods as for the underlying transactions they hedge.
Own shares and own bonds
The Group buys and sells own shares, own bonds and derivatives on own shares
within its normal trading and market making activities. In addition the Group
holds own shares to hedge commitments arising from employee compensation
schemes. Own shares are either included in the trading portfolio and carried at
fair value or held in financial investments and carried at cost. Changes in fair
value and realised gains and losses on own shares and own bonds included in
the trading portfolio are reported as Net trading income. Interest earned and divi-
dends received are reported as interest income. Derivatives on own shares are
carried at fair value and reported as positive and negative replacements values in
Other assets and Other liabilities, respectively. Realised and unrealised gains and
losses on derivatives on own shares are recognised in Net trading income.
Tangible fixed assets
Real estate held for own use, including capital improvements, is carried at cost
less depreciation over its estimated useful life, generally 40 to 67 years. No
depreciation is charged on land. Valuation adjustments are recorded for other
than temporary impairment. Other tangible fixed assets such as computers,
machinery, furnishings, vehicles and other equipment, as well as alterations and
improvements to rented premises, are depreciated using the straight-line
method over their estimated useful life, generally three to five years.
Intangible assets
The Group capitalises certain costs relating to the acquisition and installation of
software. The Group depreciates capitalised software costs on a straight-line basis
over the estimated useful life of the software, normally not exceeding three years.
Identifiable intangible assets are generally acquired through business combi-
nations and other transfers of assets. Purchased intangible assets are initially
recorded at fair value and depreciated over their estimated useful life, not to
exceed 20 years. The useful life of intangible assets relating to individuals does
not exceed five years. Additionally, such assets are regularly evaluated for other
than temporary impairment.
Goodwill represents the excess of purchase price over the estimated fair
value of net assets acquired at the acquisition date and is evaluated periodically
for other than temporary impairment. The goodwill included in this balance sheet
62

16. position arises from acquisitions after 1 January 1997. Prior to 1 January 1997,
goodwill was charged to equity. Goodwill is amortised using the straight-line
method over its estimated useful life, not to exceed 20 years. Goodwill is evalu-
ated periodically for other than temporary impairment.
The Present Value of Future Profits (PVFP) is the present value of anticipat-
ed profits embedded in the life and health insurance in force at the date each life
and health insurance portfolio was purchased. Interest accrues on the unamor-
tised PVFP based upon the policy liability rate or contract rate. The PVFP asset
is amortised over the years that such profits are anticipated to be received in pro-
portion to the estimated gross margins or estimated gross profits for participating
traditional life products and non-traditional life products, respectively, and over the
premium paying period in proportion to premiums for other traditional life products.
Expected future profits used in determining the PVFP are based on actuarial
determinations of future premium collection, mortality, morbidity, surrenders,
operating expenses and yields on assets supporting policy liabilities as well as
other factors.
The discount rate used to determine the PVFP is the rate of return required
to invest in the business being acquired. Additionally, the PVFP asset is adjusted
for the impact on estimated gross margins and profits net of unrealised gains and
losses on securities.
Each year, the PVFP asset is evaluated for recoverability. If the present value
of future net cash flows from the blocks of business acquired is insufficient to
recover the PVFP, the difference is charged to expense as an additional write-off
of the PVFP.
Deferred policy acquisition costs
Deferred policy acquisition costs consist primarily of commissions, underwriting
expense and policy issuance costs and are included in Accrued income and pre-
paid expenses. Acquisition costs, which vary with and are directly related to the
acquisition of insurance contracts, are deferred to the extent they are deemed
recoverable.
Deferred policy acquisition costs on participating traditional life products are
amortised over the expected life of the contracts in proportion to the estimated
gross margins. Deferred policy acquisition costs on other traditional life products
are amortised over the premium paying period of the related policies in proportion
to net premiums using assumptions consistent with those used in computing the
provision for future policy benefits. Deferred policy acquisition costs on non-tradi-
tional life products are amortised over the expected life of the contracts as a con-
stant percentage of the estimated gross profit.
The effect on the amortisation of deferred policy acquisition costs of revisions
to estimated gross margins or profits for all contracts is reflected in the current
period income statement. The deferred policy acquisition costs asset related to
participating traditional life products and non-traditional life products is adjusted
for the impact on estimated gross margins or profits net of unrealised gains and
losses on securities.
Deferred policy acquisition costs for non-life products are amortised over the
periods in which the premiums are earned. Future investment income attributable
to related premiums is taken into account in measuring the recoverability of the
carrying value of this asset.
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17. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Taxes
Income tax expense is calculated on the basis of the annual results of the individ-
ual financial statements of the Group companies. Deferred tax assets and liabili-
ties are recognised for the expected future tax consequences of temporary dif-
ferences between the financial statement carrying amounts and the tax bases of
assets and liabilities. Deferred tax assets and liabilities are calculated based on
expected tax rates and are recorded in Other assets and Valuation adjustments
and provisions, respectively. Deferred income tax expense represents the net
change in the deferred tax asset or liability balance during the year and is
charged to tax expense, except to the extent the change relates to transactions
recognised directly in shareholders’ equity. This amount together with income
taxes payable or receivable in the current year represents the total income tax
expense for the year. No deferred tax assets are recognised for net operating
loss carry-forwards. Other deferred tax assets are recognised subject to man-
agement’s judgment that realisation is more likely than not. No provision is made
for non-recoverable withholding taxes on undistributed profits of Group compa-
nies.
Reserve for general banking risks
In accordance with Swiss banking regulations, the reserve for general banking
risks is recorded as a separate component of shareholders’ equity. Changes to
this equity component must be recorded as an extraordinary item in the income
statement or result from reclassification from valuation adjustments and provi-
sions no longer required (disclosed as change in definition of scope).
Repurchase and reverse repurchase agreements (Repos)
The Group enters into purchases of securities under agreements to resell as well
as sales of securities under agreements to repurchase substantially identical
securities. Such agreements normally do not constitute economic sales and are
therefore treated as financing transactions. Securities sold subject to such agree-
ments continue to be recognised in the balance sheet. The proceeds from the
sale of these securities are treated as liabilities. Securities purchased under agree-
ments to resell are recognised as loans collateralised by securities. Receivables
and liabilities are valued using the accrual method; those held in the trading book
(matched book repo trading) are carried at fair value. Transactions in which eco-
nomic control over the securities transferred has been relinquished are reported as
either purchases or sales together with a related forward commitment to resell or
repurchase.
Securities lending and borrowing
Securities borrowed and lent with cash collateral and daily margining are reported
as repurchase and reverse repurchase transactions. All other securities borrowed
and lent that are collateralised by cash are included in the balance sheet at
amounts equal to the cash advanced or received. Securities lent or securities
provided as collateral for securities borrowed continue to be recognised in the
balance sheet at their carrying value if control over the securities transferred is
not relinquished. Securities borrowed and securities received as collateral for
securities lent are only recognised in the balance sheet if control over the securi-
ties transferred is relinquished. Lending fees earned or incurred are recognised
as interest income and interest expense, respectively.
64

18. Pension plans
The Group sponsors various retirement benefit plans for its employees worldwide.
These plans include both defined benefit and defined contribution plans, as
well as other retirement benefits such as post-retirement life insurance and post-
employment medical benefits. Pension expense is recorded in Personnel
expenses and is based on actuarial valuation methods and projected plan liabili-
ties for accrued service.
Premium income and related expenses
Premiums from traditional life products, both participating and non-participating,
are recognised as revenue when due from the policyholder. Profit for contracts
with a limited number of premium payments is deferred and recognised over the
period that services are provided.
Premiums from non-traditional life products are recognised as revenue when
due. For contracts with front-end fees, any excess front-end fees are deferred
and recognised in proportion to the estimated gross profits. These deferred fees
are adjusted for the impact on estimated gross profits net of unrealised gains and
losses on securities.
Premiums from non-life products are recorded at inception of the contract
and are earned primarily on a pro-rata basis over the term of the related policy
coverage with the unearned portion deferred in the balance sheet as unearned
premiums.
Reinsurance
Contracts providing for indemnification against loss or liability relating to insurance
risk have been accounted for as reinsurance. Reinsurance contracts that do not
transfer significant insurance risk are accounted for as deposits.
Gains on retroactive reinsurance ceded are deferred and amortised over the
estimated remaining settlement period.
Technical provisions for the insurance business
Provision for future policyholder benefits
The provision for future policyholder benefits for participating traditional life prod-
ucts is computed using the net level premium method, which represents the
present value of future policy benefits less the present value of future net premi-
ums. The method uses assumptions for mortality and interest rates guaranteed
in the contracts or used in determining dividends.
The provision for future policyholder benefits for other traditional life products
is computed using the net level premium method. The assumptions are based on
the Group’s experience and industry standards including provision for adverse
deviations that were in effect as of the issue date of the contract.
The provision for future policyholder benefits for non-traditional life products is
equal to the account value, which represents premiums received and allocated
investment return credited to the policy less deductions for mortality costs and
expense charges.
When the provision for future policyholder benefits plus the present value of
expected future gross premiums for a product are insufficient to provide for
expected future benefits and expenses for the line of business, deferred policy
acquisition costs are written off to income and thereafter, if required, a premium
deficiency reserve is established by a charge to income. A premium deficiency
reserve is adjusted for the impact of net unrealised gains and losses.
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19. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Provision for death and other benefits
Claim reserves represent amounts due on life and accident and health claims that
have accrued as of the balance sheet date, but have not yet been paid. This
includes incurred but not reported claims (IBNR) and claims expense liability. The
interest rate used to discount future payments is impacted by the net unrealised
gains and losses on securities, resulting in an adjustment to claim reserves.
Provision for future dividends to policyholders
Dividends on participating traditional life products are accrued when earned and
calculated in accordance with local statutory or contractual regulations. The provi-
sion for policyholder dividends also includes a deferred bonus reserve (DBR),
which represents amounts that result from differences between these presented
financial statements and the local statutory financial statements and that will
reverse and enter into future policyholder dividends calculations. The calculation
of the DBR reflects only the contractual or regulatory defined minimum distribu-
tion to policyholders.
The provision for policyholder dividends is adjusted for the impact of net un-
realised gains and losses on securities to the extent that the policyholder will
participate in such gains and losses on the basis of contractual or regulatory re-
quirements when they are realised.
Provision for unpaid claims and claim adjustment expenses
Claim and claim adjustment expenses are recorded as incurred. Claim reserves
comprise estimates of the unpaid portion of the reported losses and estimates of
the amount of losses incurred but not yet reported to the insurer. Management
periodically reviews the estimates, which may change in light of new information.
Any subsequent adjustments are recorded in the period in which they are deter-
mined.
Certain claim reserves are discounted for individual claims whose payment pat-
tern and ultimate cost are fixed and reliably determinable.
2 Changes to accounting policies
Banking business
Repurchase and reverse repurchase agreements (Repos)
Prior to year-end 2000, repo transactions where the cash taker has lost economic
control over the collateral provided were also recorded as advances secured by
securities or as deposits against which the bank’s securities are pledged. The
1999 balance sheet amount would not be materially different had they been pre-
pared under the new policy.
Securities lending and borrowing (SLBs)
Prior to year-end 2000, securities borrowed and lent with collateral and no daily
margining were recorded as inventory movements with corresponding receivables
and payables arising therefrom. Securities borrowed and lent with non-monetary
collateral and daily margining were recorded as a combination of a repurchase and
reverse repurchase agreement. The 1999 balance sheet amount would not be
materially different had they been prepared under the new policy. SLB fees earned
or incurred are recognised as interest income and interest expenses, respectively.
66

20. Prior to year-end 2000, lending fees were reported as commission income or
expense, respectively. The impact on the 1999 consolidated income statement
would have been CHF 111 million higher had they been prepared under the new
policy.
Insurance business
Within the framework of the Swiss Accounting and Reporting Recommendations,
Credit Suisse Group has changed its accounting policies in the year 2000 in
order to increase the transparency for its insurance business and to align with a
more internationally-recognised standard. The Group’s financial statements as
of 31 December 1999 have also been restated to conform with the current year’s
presentation. In the tables of this publication, 1999 results will be shown in
“previously reported” as well as in “new basis” columns.
A summary of previously reported compared to new basis accounting policies
is shown below. The following table shows the effects of the changes to the
accounting policies:
Previously reported New basis
Life
– Premiums for contracts were recognised – Premiums for contracts are recognised when
as written when due from the policyholder. due from the policyholder with any deferred
profit capitalised and recognised over the peri-
od that services are provided.
– Acquisition costs were recorded and deferred – All acquisition costs that vary with and are
in accordance with local regulations. primarily related to the acquisition of business
are deferred and amortised to expense based
on the product classification of the insurance
contracts.
– Provision for future policy benefits were based – The provision for future policy benefit liabilities
on the expected liabilities due to the insured is calculated based on the benefits attributable
and the claimants. Reserves were calculated to the policyholders as set out in the insurance
in accordance with supervisory authorities of contracts.
the respective countries.
– Provision for death and other benefits were – Provision for death and other benefits are
calculated based on statutory methodology. calculated using the best estimate of future
A reserve for claims incurred but not reported claims expense liability. In addition, a provision
was recorded for disability claims only. is established for claims incurred but not
reported for all claims.
– A provision for future dividends to policyhold- – A provision for future dividends to policyholders
ers as submitted to regulators was accrued, on participating traditional life products is
with additional funds accrued for future policy- accrued when earned. In addition, a deferred
holder dividends as deemed necessary by bonus reserve is established when there is
management. a contractual or legally defined minimum
distribution to policyholders based on the
regulatory requirements.
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21. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Previously reported New basis
Life
– A PVFP asset was not recognised as a – A PVFP asset is established and represents
separate intangible asset but was included in the projected future profits from the in-force
goodwill. acquired policies. The PVFP asset is amor-
tised to match the profits arising from the
acquired in-force business.
Non-life
– Premiums written, deferred policy acquisition – Premiums written, deferred acquisition costs
costs and technical provisions were calculated and technical provisions are treated consis-
in accordance with local supervisory regula- tently.
tions of the respective countries except that
the equalisation reserves legally prescribed – Technical provisions are carried in all locations
and locally recorded in some countries were based on best estimate without any equalisa-
not included in Group accounts. tion reserves.
– All reinsurance contracts were considered – Reinsurance contracts that do not transfer
insurance transactions and were accounted significant insurance risk are accounted for as
for as insurance. deposits.
Investments
– Real estate was carried at fair value. Unre- – Real estate held for investment and real estate
alised gains were recorded in equity while held for own use are carried at depreciated
unrealised losses were recorded in the cost. Depreciation and write-downs due to
income statement. Both real estate held for other than temporary impairment are charged
investment and own use were included in to the income statement. Real estate held for
investments. investment is included in investments from the
insurance business, and real estate held for
own use is included in tangible fixed assets.
– Debt securities were carried at amortised – Debt and equity securities classified as avail-
cost. Equity securities were carried at fair able for sale are carried at fair value.
value. Unrealised gains were recorded in Unrealised gains and losses are recorded as a
equity while unrealised losses were recorded separate component of shareholders’ equity,
in the income statement. net of taxes.
– Certain securities are classified as trading and
are carried at fair value. Gains and losses
from changes in valuation are recognised as
investment income.
– Unrealised foreign exchange gains and losses – Unrealised foreign exchange gains and losses
relating to securities denominated in foreign relating to securities denominated in foreign
currencies were recognised in income. currencies are recorded as unrealised gains
and losses in shareholders’ equity.
– Realised gains on securities were calculated – Realised gains and losses are determined
using the average method. using the specific identification method.
68