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 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 near future, have been valued at cost of purchase or construction reduced by income realised. In both cases valuations made do not exceed the market value. As a result of the sale of real estate in operation, the difference between proceeds and book value is accounted for. For a few old projects the sales result thus fixed is transferred to the replacement reserve. The fiscal claim weighing on this replacement reserve has been accounted for under 'Provision for latent tax liabilities'. Real estate under development is valued at the costs, including interest, incurred for the projects concerned till the moment of sale or lease. 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. Receivables, including the receivables from participations, have been valued at nominal value after deduction of provisions deemed necessary. Nominal assets and liabilities in foreign currency have been valued at the rates of exchange per the balance sheet date. The other assets have been valued at the historical rates. 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 other gains and charges are generally accounted for in the year to which they relate. The company income tax figuring in the profit and loss account has been calculated on the balance of this account with due 40

Rabobank Bronnenarchief

Annual Reports FGH Bank | 1978 | | pagina 42