Amounts in foreign currencies are translated at the exchange rates on the balance
sheet date.
Exchange differences on participating interests are reflected directly in stockholders’
equity in the item Exchange differences reserve.
In a few instances long-term foreign currency loans are entered into in the
expectation that during the term of the loan the interest advantage will exceed any
exchange losses. An amount is added to the Reserve for exchange risks for such
loans which is equal to the difference between interest and placement costs for
these loans as compared with similar domestic loans, reduced by any hedging costs.
Exchange differences and any hedging costs with respect to these loans are charged
to this reserve.
Other exchange differences are included in the result.
Income and expense are generally recorded in the year to which they relate.
Incidental income and expense in connection with lending and borrowing activities
are recognized in the income statement in the year in which the assets or liabilities
are contracted.
Investment subsidies are included in the Investment subsidy equalization account.
An amount is released from this account annually determined on the basis of the
depreciation period for the asset.
The corporate income tax shown in the income statement is computed on the net
result taking into account exempted income elements.
The reserve for deferred tax liabilities concerns the differences between fiscal and
commercial equity, taking account where appropriate of losses available for relief
insofar as it is reasonable to anticipate the relief being claimed, and of fiscal
replacement reserves. This reserve is included in Payables.
A list of names and registered offices of participating interests has been filed with
the Amsterdam Chamber of Commerce.
The company income statement of Friesch-Groningsche Hypotheekbank N.V. has
been prepared in conformity with the provisions of Section 402, Book 2 of the
Dutch Civil Code.
30
