EXPLANATORY
NOTES
basis of replacement value over their estimated useful
life with allowance being made for a residual value. The
change in value as a result of this accounting policy has
been taken to the revaluation reserve with allowance
being made for deferred taxation.
Real estate not for own use:
- Properties earmarked for sale are valued at acquisition
or development cost, less depreciation or, if lower, at
net realizable value.
- Properties to be kept as long-term investments are
valued at net realizable value.
- Development properties are valued at the lower of
construction cost or net realizable value.
Equipment:
Equipment is valued at acquisition cost less
depreciation; the latter is calculated on a straight-line
basis over the estimated useful life.
Taxation
Deferred assets and liabilities, arising from differences
in the fiscal treatment of assets and liabilities, are
valued at present value as per the balance sheet date.
Net deferred tax assets are shown under 'Prepayments
and accrued income'.
Corporate income taxes are included under 'Other debt'.
Premiums or discounts on securities and loans are
included under the relevant receivables or debts in the
income statement and are accounted for over the
remaining life of the relevant items. Securities are
included at acquisition cost or at their cash value at
issue. Other accruals and deferrals are specified
separately.
Interest-bearing Securities and Shares
Interest-bearing securities and shares, which all form
part of the trading portfolio, are valued at their market
value as per the balance sheet date.
Foreign Currency Conversions
Assets and liabilities expressed in foreign currencies are
translated into Dutch guilders at the appropriate
exchange rates as per the end of the financial year.
Items in the income statement expressed in foreign
currencies are translated into Dutch guilders using a
weighted average exchange rate for the financial year in
question.
Any translation differences arising from the application
of both year-end exchange rates and weighted average
rates are reflected in the shareholders' equity under
'Other reserves'.
The result of foreign currency transactions connected
with coverage variances in respect of foreign
participating interests, including the associated results
on hedging transactions, are reflected in the
shareholders' equity under 'Other reserves', after having
taken due account of all relevant fiscal implications.
All other foreign exchange differences are taken to the
result.
Result Determination
The way in which a number of the more specific items
have been reflected in the financial statements has been
discussed in the preceding sections. Income and expense
items are generally accounted for in the year to which
they relate.
Interest income, including the results of interest
instruments and credit commission, are accounted for
in the financial year to which they relate, unless they
are deemed uncollectible.
Non-recurring receipts and expenditure, associated with
lending and borrowing activities are generally accounted
for in the income statement of the year in which the
funds are lent out or borrowed.
Other commission income is generally accounted for in
the year of receipt. The expenses are assigned to the
financial year to which they relate.
In calculating the tax payable, the amount representing
'Value adjustments to receivables' is treated as a charge.
15
