accounting treatment on the result for 2002 is 0.9 million
positive. (The effect on the result for 2001 would have been
0.3 million positive). The 2001 figures are adjusted
accordingly. The cumulative effect of this change as at
1 January 2001 has been deducted from other reserves
6.2 million).
LOANS
Loans are valued at nominal value after deduction of value
adjustments for bad and doubtful debts. Value adjustments
to take account of uncollectable debts are generally
determined for each separate item, taking account of the
value of collateral provided.
Any subsequent upward value adjustments and
readjustments of downward value adjustments applied to the
'Loans' item are shown in the income statement under
'Value adjustments to receivables'.
Interest and commission credited in respect of which there
is doubt about their collectability are not recognized as
income. This relates in particular to interest and
commission not received and charged on loans to which a
downward value adjustment has been applied.
INTEREST-BEARING SECURITIES
Interest-bearing securities forming part of the investment
portfolio are stated at nominal value.
SHORT-TERM GOVERNMENT PAPER AND SHARES
Short-term government paper forming part of the
investment portfolio is stated at face value as at the balance
sheet date. Shares forming part of the investment portfolio
are stated at acquisition cost.
PARTICIPATING INTERESTS
Participating interests in which FGH Bank N.V. or its
subsidiary companies exercise a significant influence on
commercial and financial policy are valued at net asset
value, determined in accordance with the accounting
policies applied by FGH Bank N.V.
Other participating interests are also valued at net asset
value. Changes to this value, if they relate to the results, are
shown together with the results from the sale of
participating interests, under 'Income from securities and
participating interests'.
PROPERTY AND EQUIPMENT
Property for own use:
Office buildings in the company's own use are valued at
replacement cost based on periodical valuation. External
valuations are carried out every five years to determine
their value. The buildings in question are depreciated on
the basis of replacement value over their estimated useful
life with allowance being made for residual value.
The change in value as a result of this accounting policy is
taken to the revaluation reserve with allowance being
made for deferred taxation.
Property not for own use:
Properties held for sale are valued at acquisition or
development costs, less depreciation or, if lower, at net
realizable value.
Properties to be kept as long-term investments are valued
at net realizable value.
Development properties are valued at the lower of
construction cost and net realizable value.
Equipment
Equipment is valued at acquisition cost less depreciation;
the latter is calculated on a straight-line basis over the
estimated useful life.
TAXATION
Deferred tax debits and credits arising from differences in
the fiscal treatment of assets and liabilities are calculated at
present value as at the balance sheet date. Net deferred tax
assets are shown under 'Prepayments and accrued income'.
Corporate taxes due are included under 'Other liabilities'.
The calculation of the rate of tax is based on the 'Result
before taxation' shown in the income statement, taking
account of sums which are not deductible or where scope
for deduction is limited.
