Balance Sheet Deficit definition
Balance Sheet Deficit. (Bilanzverlust) of the Bank means that no distributable profits (Bilanzgewinn) are shown on the Bank’s unconsolidated balance sheet of the financial statements as calculated under the Participation Agreement in accordance with the applicable accounting standards ("Balance Sheet Profit"). Under the applicable accounting standards, the Balance Sheet Profit is derived from the net profit (Jahresüberschuss) or net loss (Jahresfehlbetrag) for the year adjusted for profits/losses carried forward from the previous fiscal year as well as transfers from capital reserves and revenue reserves (Kapital- und Gewinnrücklagen) and allocations to revenue reserves as well as transfers from and the reinstatement of the participatory capital (Genussrechtskapital). However, the Bank is not obligated to release any such reserves or to realise any hidden reserves to ensure an annual Balance Sheet Profit. If, during the term of the silent partnership, the Bank enters into a profit and loss transfer agreement as controlled company, the effect of such profit and loss transfer agreement shall be disregarded when determining the net profit or net loss, provided, however, that in respect of the sharing of losses the position of the silent partner shall not be less favourable than the position of a holder of other present or future instruments of the Bank qualifying as core capital and/or additional capital.