AmazonScience/document-haystack

1The liabilities incurred are re-measured at the end of each reporting period until settlement 2with recognizing any gains and losses in profit and loss.3Deutsche Bank Share-Based Plans (Equity-settled)4Some Group employees continue to hold deferred awards granted under the DB Equity Plan, 5under the rules established for Deutsche Bank Group as applicable. 6Share-based payment transactions where Deutsche Bank AG have granted Deutsche Bank 7AG shares to the employees of the Group are classified as equity-settled transactions 8reflected in the equity in the consolidated financial statements of the Group as Deutsche Bank 9AG has the obligation to settle the shares.10The substance of the Deutsche Bank’s share award programs is that Deutsche Bank AG 11makes a capital contribution to the Group, which correspondingly makes a share-based 12payment to its employees in exchange for services. Compensation cost related to the grant of 13parent company awards to employees of the Group are recognized in the consolidated 14financial statements as compensation expense with a corresponding credit to equity. The 15compensation expense based on the fair value at grant date of the awards (and adjusted for 16expected forfeitures) is amortized over the requisite substantial service period of the award.17For share awards, the fair value is the quoted market price of the share reduced by the 18present value of the expected dividends from Deutsche Bank AG that will not be received by 19the employee and adjusted for the effect, if any, of restrictions beyond the vesting date. In 20case an award is modified such that its fair value immediately after modification exceeds its 21fair value immediately prior to modification, a re-measurement takes place and the resulting 22increase in fair value is recognized as additional compensation expense in the consolidated 23financials of the Group. 24Compensation expense is recorded on a straight-line basis over the period in which 25employees perform services to which the awards relate or over the period of the tranches for 26those awards delivered in tranches. Estimates of expected forfeitures are periodically 27adjusted in the event of actual forfeitures or for changes in expectations. The timing of 28expense recognition relating to grants which, due to early retirement provisions, include a 29nominal but non-substantive service period is accelerated by shortening the amortization 30period of the expense from the grant date to the date when the employee meets the eligibility 31criteria for the award, and not the vesting date. For awards that are delivered in tranches, 32each tranche is considered a separate award and amortized separately.33If there are recharge arrangements in place to compensate Deutsche Bank AG for the cost of 34acquiring the shares to settle its obligation, the Group recognizes a corresponding liability 35that is accrued over the respective service/vesting period.36From the perspective of the Group, the recharge forms part of the determination of the net 37capital contribution received in respect of the share-based payment transaction. As the Group 38recognizes a capital contribution as part of the accounting for the share-based payment 39transaction, the Group recognizes its reimbursement of the contribution to DB Group Services 40Ltd. (as administrator of the Deutsche Bank group-wide award process) as an adjustment of 41that capital contribution. The Group therefore recognizes a recharge liability with a 42corresponding debit in equity.43The liabilities incurred are re-measured at the end of each reporting period until settlement, 44recognizing any gains and losses in equity. 45Post-Employment Benefit Plans46The Group provides a number of pension benefits. In addition to defined contribution plans, 47there are retirement benefit plans accounted for as defined benefit plans. The assets of all the 48Group’s defined contribution plans are held in independently administered funds. 49Contributions are generally determined as a percentage of salary and are expensed based on 50employee services rendered, generally in the year of contribution.51All retirement benefit plans accounted for as defined benefit plans are valued using the 52projected unit-credit method to determine the present value of the defined benefit obligation 53and the related service costs. Under this method, the determination is based on actuarial 54calculations which include assumptions about demographics, salary increases and interest 55and inflation rates. Actuarial gains and losses are recognized in other comprehensive income 56and presented in equity in the period in which they occur. The majority of the Group’s benefit 57plans is funded.58In addition, the Group maintains other post-employment benefits, such as unfunded 59contributory post-employment medical plans for a number of current and retired employees 60who are mainly located in the United States. These plans pay stated percentages of eligible 61medical and dental expenses of retirees after a stated deductible has been met. Deutsche 62Bank Group funds these plans on a cash basis as benefits are due and re-charges these 63amounts to the Group. Analogous to retirement benefit plans these plans are valued using the 64projected unit-credit method. The Group only pays for participation in these plans.65         66To our 67Shareholders68Summarised 69Management Report70Consolidated 71Financial Statements Compensation Report Corporate Govern-72ance Statement73Supplementary 74Information DWS 2023 Annual Report75 76Notes to the Consolidated Financial Statements7783 02 – Significant Accounting Policies and Critical Accounting Estimates