Explanatory notes
General
38
The combined balance sheet and profit and loss account com
prise the annual accounts of the majority participations in real
estate companies and other diversifications.
The general basis of valuation for real estate in operation is: cost
of purchase or construction reduced by an annual depreciation.
Depreciation is based on these costs, taking into account the
useful life. A few objects, the sale of which is intended in the
6 b6en ,Valued at cost of Purchase or construction
reduced by income realised but not higher than the market value.
As a result of the sale of real estate in operation, the difference
between proceeds 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
accounted for under 'provision for latent tax liabilities'. Their
computation is based on the cash value of future tax liabilities.
Real estate under development is valued at the 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 real estate. 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 in which 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 cost and frequency of periodic
maintenance and the expenses incurred in such a year are
charged to this provision. 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 proportion to the balance sheet value of the
qualifying projects.
The company income tax figuring in the profit and loss account
has been calculated on the balance of this account with due
observance of exempted components of profit.
The security positions are valued in such a way that losses on
market value recorded on the balance sheet date are reflected in
the result but unrealised profits on market value are not reflected
in the result.
