Consolidation Principles
The consolidated financial statements represent the figures of the Friesch-
Groningsche Hypotheekbank N.V. and its subsidiaries. Participating interests which
can be regarded as joint ventures are proportionately consolidated.
Equity and Result Determination Principles
Marketable securities are stated at their quoted prices on the balance sheet date,
except for bonds which form part of the investment portfolio. These are stated at
their redemption value less an amount equivalent to any diminution in value.
Unquoted securities are included at their estimated market value as per balance
sheet date.
Receivables are included at face value less deductions for uncollectability of certain
items. Additionally a reserve, which is included in Payables, has been formed to
cover risks inherent in the granting of credit (Section 11 (2) of the Credit
Supervision Act).
Participating interests are stated at their net asset values, applying the valuation
principles used by Friesch-Groningsche Hypotheekbank N.V. Movements in net
asset value due to the results achieved are shown in Results of participating
interests, as are results on sales of participating interests.
Real estate development projects are included at cost including interest during the
construction period, as well as a margin to cover the overhead involved in the
project concerned, up to the date of completion. Real estate under development is
not stated at above its market value, however. Results on sales are recognized in the
year in which projects are completed, or, if the sales result is known, in the year in
which parts of projects are completed. Purchase sums received are applied against
the cost of development projects. A reserve is formed to cover the risk of vacancy
during the period between completion and first lease of development projects.
Work in progress of the construction company is included in Real estate develop
ment projects after deduction of installments received. Valuation is at cost including a
margin for overheads. Results are recognized in the year in which contracts are
completed. Foreseeable losses are deducted from the valuation when they become
evident.
Real estate operated by the company, insofar as it was developed by the company, is
valued on the same basis as real estate development projects. Real estate acquired from
third parties is valued at purchase price. Real estate operated by the company is not
stated in excess of market value. The difference between sales proceeds and book value
is shown as the sales result on real estate formerly operated by the company.
Office buildings in use by the company are stated at current value. Depreciation is
provided on real estate operated by the company and on office buildings in use by
the company, taking estimated useful life and residual values into account.
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