We prepare our Financial Statements in accordance with
IFRS as issued by the International Accounting Standards
Board. The application of certain of these accounting principles
requires considerable judgment based upon estimates
and assumptions that involve significant uncertainty at the
time they are made. Changes in assumptions may have a
significant impact on the Financial Statements in the periods
where assumptions are changed. Accounting treatments
where significant assumptions and estimates are used are
discussed in this section, as a guide to understanding how
their application affects our reported results. A broader and
more detailed description of the accounting policies we
employ is shown in Note 1 to the Financial Statements.
The application of assumptions and estimates means that
any selection of different assumptions would cause our reported
results to differ. We believe that the assumptions we
have made are appropriate, and that our Financial Statements
therefore present our financial position and results
fairly, in all material respects. The alternative outcomes
discussed
below are presented solely to assist the reader in
understanding our Financial Statements, and are not intended
to suggest that other assumptions would be more appropriate.
Many of the judgements we make when applying accounting
principles depend on an assumption, which we
believe
to be correct, that UBS maintains sufficient liquidity
to hold positions or investments until a particular trading
strategy matures – i. e. that we do not need to realize positions
at unfavorable prices in order to fund immediate cash
needs. Liquidity is discussed in more detail in the Treasury
Management chapter of the Risk, Treasury and Capital
Management
report.
