explanatory notes
general
The combined balance sheet and profit and loss account comprise
the annual accounts of the majority participations in real estate
companies and in other diversifications.
The general basis of valuation for real estate in operation is: cost of
purchase or construction reduced by an annual depreciation. Depre
ciation is based on these costs, taking into account the estimated
length of life. A few objects, the sale of which is intended in the
near future, have been valued at cost of purchase or construction
reduced by income realised.
As a result of the sale of real estate in operation, the difference be
tween income and book value is accounted for. Except for a few
special projects, the sales result thus fixed is transferred to the
replacement reserve.
The fiscal claim weighing on this replacement reserve and the
fiscal claim resulting from valuation differences have been ac
counted for under 'provision for latent tax liabilities'. Their compu
tation is based on the cash value of future tax liabilities.
Real estate under development is valued at costs, including interest,
incurred for the projects concerned till the moment of lease or sale.
Interest is calculated on the amount invested at the average interest
rate for mortgage loans. The valuation per project will not exceed
the market value of the property. The result of a sale is accounted
for in the year in which a project is completed or - if the result of
the sale is certain - in the year when part of the project is
completed.
(Minority) participations are valued at cost.
The other gains and charges are generally accounted for in the year
to which they relate.
The provision for maintenance is meant to lead to a better spread
of the cost of periodic maintenance. To the charge of the result, this
provision is annually increased by an amount calculated per object
on the basis of the costs and the frequency of periodic maintenance
and the expenses incurred in such a year are charged to this pro
vision.
The method applied entails that the amount that should be present
in the provision can at any time be calculated per real estate project
and per category of maintenance.
A provision is made to cover the risk of unoccupied premises during
the period between completion of development projects and their
first lease. The amount of this provision is fixed annually in pro
portion to the balance sheet value of the qualifying projects.
