Explanatory Notes
General
Basis of Consolidation
Principles for Equity and Result
Determination
On August 13, 1991 De Nederlandsche Bank N.V.
granted the bank permission to operate as per January 1,
1992 as a credit institution within the meaning of
Section 1 (a) of the Credit System (Supervision) Act.
The 1992 annual accounts are therefore based on the
regulations and recommendations of
De Nederlandsche Bank N.V. with respect to the
specimen 'annual accounts of registered institutions' as
applying to general banks. The comparative figures for
1991 have consequently been adjusted correspondingly.
At the end of December 1992 FGH BANK N.V.'s 100%
interest in FGH North America Inc. was transferred to
AEGON U.S. Holding Corporation. The results of that
participation have been included in the consolidation.
The group financial statements include the figures for
FGH BANK N.V. and its subsidiaries and group
companies.
In the case of participations designated as joint ventures,
proportional consolidation has been applied in so far as
the joint venture is a financial institution. Other joint
ventures have been included in the group accounts as
participations. The income from non-consolidated
participations has been included under 'Results of
Participating Interests'.
Assets and Liabilities
Assets and liabilities are valued at nominal value, unless
otherwise indicated.
The necessary reductions in value have been applied to
the assets. In so far as these reductions derive from bad
debts, they are generally determined for each item.
Premiums or discounts on debt securities and loans are
included under Receivables and Payables respectively
and are reflected over the remaining life of the relevant
items in the profit and loss account. With the exception
of bonds and shares in the securities portfolio, debt
securities are included at acquisition price or cash value
at issue. Savings deposits are included inclusive of
accumulated interest, in so far as interest is added to the
account itself.
The remaining accrued assets and liabilities are
included under Receivables and Payables respectively.
Marketable Securities
Marketable Securities, which all form part of the
trading portfolio, are valued at market value. Non-listed
securities are valued at the estimated liquidation value
at the balance sheet date.
Foreign Currency Conversions
Assets and liabilities in foreign currencies are converted
at the exchange rates at the end of the financial year.
Items in the profit and loss account in foreign currencies
are converted at a weighted average exchange rate for
the financial year. Any conversion differences arising
from the application of both year-end exchange rates
and weighted average rates are reflected in stockholders'
equity under 'Exchange Differences Reserve'.
Exchange results due to coverage variances with foreign
participations are including the associated hedging
transactions reflected in stockholders' equity under
'Exchange Differences Reserve'. All other exchange
differences are reflected in the result.
Participations
Participations are valued at equity value on the basis of
valuation principles as applied by the FGH BANK N.V.
Interests in the non-consolidated participations in
excess of 20% are valued at net asset value.
Amendments to the equity value, in so far as these
affect the results obtained, are carried together with the
income from the sale of participations under 'Results of
Participating Interests'.
Real estate, Furniture and Fixtures
Real estate for own use:
The office buildings used by the bank are valued at
current value. Improvements are amortized on a
straight-line basis over the estimated useful life,
allowing for a residual value.
Real estate not for own use:
Properties intended for sale are valued at acquisition or
formation cost, less amortization or, if lower, at likely
market value.
Furniture and fixtures:
Furniture and fixtures are valued at acquisition price
less amortization; the latter is calculated on a
straight-line basis over the estimated economic life.
Provisions
Provisions are included under payables.
Provision for general contingencies:
This provision relates to the general risk incurred
directly or by participations as a result of lending and
related banking operations.
