Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
Other intangible assets also include those identified through
business combinations, and they are amortised over their
expected useful lives.
Impairment losses on goodwill
Goodwill is allocated to cash-generating units for the purpose
of impairment testing, which is undertaken at the lowest level
of assets that generate largely independent cash inflows.
During the fourth quarter of each financial year, or more
frequently if there are indications of impairment, goodwill is
tested for impairment and any excess of carrying amount over
recoverable amount is provided.The recoverable amount is the
higher of the value in use and the fair value less selling costs.
The value in use of a cash flow generating unit is determined as
the present value of the expected future pre-tax cash flows of
the cash flow generating unit in question. The key assumptions
used in the cash flow model depend on the input data and they
reflect various judgemental financial and economic variables,
such as risk-free interest rates and premiums reflecting the
risk inherent in the entity concerned. Impairments of goodwill
are included under 'Impairment losses on goodwill' in the
statement of income.
Impairment losses on other intangible assets
At each reporting date, an assessment is made as to whether
there are indications of impairment of other intangible assets.
If there are such indications, impairment testing is carried out to
determine whether the carrying amount of the other intangible
assets is fully recoverable.The recoverable amount shall be
estimated for the individual asset. If it is not possible to estimate
the recoverable amount of the individual asset, the recoverable
amount of the cash generating unit to which the asset belongs
is determined. An impairment loss is recognised if the carrying
amount exceeds the recoverable amount. Impairment losses
and impairment reversals are included in 'Other administrative
expenses'in the statement of income.
2.17 Property and equipment
Property and equipment for own use
Property for own use consists mainly of office buildings
and is recognised at cost less accumulated depreciation
and impairment, as is equipment for own use. Assets are
depreciated to their residual values over the following
estimated useful lives:
Property
- Land Not depreciated
- Buildings 25-40 years
Equipment
- Computer equipment 1-5years
- Other equipment and vehicles 3-8years
An annual assessment is made as to whether there are
indications of impairment of property and equipment.
If the carrying amount of an asset exceeds its estimated
recoverable amount, the carrying amount is written down to
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 inven 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
269 Notes to the company financial statements