es
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less
:ms.
Pay-
t in
the
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ink
the
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ied,
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ost
to
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ire
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 val
ued 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.
Amounts in foreign currencies are trans
lated at the exchange rates on the balance sheet
date. Exchange differences on participating inter
ests 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 differ
ences 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 par
ticipating interests has been filed with the
Amsterdam Chamber of Commerce.
The company income statement of Friesch-
Groningsche Hypotheekbank N.V has been pre
pared in conformity with the provisions of Sec
tion 402, Book 2 of the Dutch Civil Code.
25