Inhoudsopgave Voorwoord Bestuursverslag Corporate governance
Consolidated Financial Statements Company Financial Statements Pillar 3
the recoverable amount. Impairment losses and impairment
reversals are included under 'Other administrative expenses' in
the statement of income. Gains and losses on the disposal of
property and equipment are determined on the basis of their
carrying amounts and are recognised in operating results.
Repair and maintenance work is charged to the statement
of income at the time the costs are incurred. Expenditures to
extend the economic life or increase the economic value of
land and buildings as compared with their original economic
value are capitalised and subsequently depreciated.
2.18 Investment properties
Investment properties, primarily office buildings, are held for
their long-term rental income and are not used by Rabobank
or its subsidiaries. Investment properties are recognised as
long-term investments and included in the statement of
financial position at cost net of accumulated depreciation and
impairment. Investment properties are depreciated to their
residual values over an estimated useful life of 40 years.
2.19 Other assets
Structured i riven tory products
Rabobank offers several products that relate to financing
commodities. Some of these products are recognised as loans
with commodities as collateral, others as loans with embedded
derivatives and others as commodities.The classification is
mainly dependent on the transfer of risk and rewards of the
commodity from the client to Rabobank.
Building sites and equalisation funds
Building sites are carried at cost, including allocated interest
and additional expenses for purchasing the sites and making
them ready for construction or, if lower, the net realisable value.
Interest is not recognised in the statement of financial position
for land which has not been zoned for a particular purpose
if there is no certainty that the land will be built on. Possible
downsides that depend on a future change of designated use
of the relevant land are not included in the cost of land, but are
included in the determination of the net realisable value.
The net realisable value of all building sites is reviewed at least
once a year or if there are any indications an earlier review.
The net realisable value for building sites is the direct realisable
value or, if higher, the indirect realisable value.The direct
realisable value is the estimated value upon sale less the
estimated costs for achieving the sale.The indirect realisable
value is the estimated sale price within the context of normal
operations less the estimated costs of completion and the
estimated costs necessarily incurred to realise the sale, in which
respect the expected cash flows are discounted at the weighted
average cost of capital. The calculation ofthe indirect realisable
value is based on an analysis of scenarios that includes as many
site-specific aspects and company-specific parameters and
conditions as possible. A downward revaluation is recognised if
the carrying value exceeds the realisable value.
The equalisation funds relate to building rights purchased
from third parties recognised in the statement of financial
position, as well as building rights which arose on the sale of
building sites to municipal authorities or other parties, and
these are stated as the balance ofthe cost ofthe sites and the
sales proceeds.The equalisation funds, which are stated net of
any necessary depreciations, should be recovered from future
building projects.
Work in progress
Work in progress concerns sold and unsold commercial
property projects, as well as sold and unsold residential projects
under construction or in preparation. Work in progress is carried
at the costs incurred plus allocated interest or, if lower, the net
realisable value. If the project qualifies as an agreementfor
the construction of real estate commissioned by a third party,
the result is also recognised in work in progress according
to the stage of completion. Expected losses on projects are
immediately deducted from the work in progress. If the buyer
has no or only limited influence, but the risk is gradually
transferred to the buyer during construction, the result is
also recognised in work in progress according to the stage
of completion. If there is no such gradual transfer of risk,
the result is recognised on the date of completion. Progress
instalments invoiced to buyers and principals are deducted
from work in progress. If the balance of a project is negative
(progress instalments invoiced exceed the costs recognised in
the statement of financial position), the balance of that project,
including any provision for the project, is transferred to 'Other
liabilities'.
The carrying amount of unsold work in progress is annually
reviewed for indications of any decline in value. If there is
such an indication, the indirect realisable value ofthe work
in progress is estimated; in most cases this is done by means
ofan internal or external appraisal. The indirect realisable
value is the estimated sale price within the context of normal
operations less the estimated costs of completion and the
estimated costs necessarily incurred to realise the sale.
A downward value adjustment is recognised if the carrying
value exceeds the expected indirect realisable value, to the
extent that this difference must be borne by Rabobank.
Finished properties
Unsold commercial and residential properties developed
in-house are carried at cost or, if lower, the net realisable value.
The net realisable value of finished properties is reviewed at
least once a year or if there are any indications for an earlier
188 Rabobank Jaarverslag 2016
