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 principle 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 costs of purchase or construction reduced by income realised.
In both cases valuations made do not exceed the market value.
As a resu It of the sale of rea I 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 underdevelopment 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.
Purchase sums received, will be deducted from real estate in
development.
Works in progress of the building firm are included under Real estate
under development after deduction of instalments received. Valuation
is made at cost including a loading for indirect costs of 5%. Foreseeable
losses are deducted from the valuation in the year in which they have
been incurred. The result is accounted for in the year in which the work
has been 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.
With effect from 1980 all assetsand liabilities, which are denominated in
foreign currencies, are recalculated at exchange rates as at the balance
sheet date. The currency differences in respect of the whole concern
resulting therefrom are passed on to a central account with the parent
company. The balance of currency differences thus obtained is booked
as a change in the equity capital.
The provision for maintenance is meant to lead to a better spread of the
costs 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.
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