Inhoudsopgave Voorwoord Bestuursverslag Corporate governance
Consolidated Financial Statements Company Financial Statements Pillar 3
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 of the 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 of the cost of the 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 agreement for
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 of the 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
review. For finished properties, the net realisable value is
generally equal to the direct realisable value, which is mostly
determined by means ofan internal or external appraisal.
A downward value adjustment is recognised if the carrying
value exceeds the expected direct realisable value, to the extent
that the difference must be borne by Rabobank.
2.20 Leasing
Rabobank as lessee
Leases relating to property and equipment under which
virtually all risks and rewards of ownership vest with Rabobank
are classified as finance leases. Finance leases are capitalised
at the inception of the lease at the lower of the fair value of
the leased assets and the present value of the minimum lease
payments. Lease payments are apportioned between the lease
liability and the finance charges so as to achieve a constant
rate of interest on the remaining balance of the liability.
The corresponding lease liabilities are included under 'Other
liabilities'afterthe deduction offinance charges.The interest
components of the finance charges are charged to the
statement of income over the term of the lease. A tangible fixed
asset acquired under a lease agreement is depreciated over the
shorter of the useful life of the asset and the term of the lease.
Leases under which a considerable portion of the risks and
rewards of ownership are retained by the lessor are classified as
operating leases. Operating lease payments (less any discounts
granted by the lessor) are charged to the statement of income
on a linear basis over the term of the lease.
Rabobank as lessor
Finance leases
A finance lease is recognised as a receivable under 'Loans and
advances to banks'or'Loans and advances to customers', as
applicable, at an amount equal to the net investment in the
lease. The net investment in the lease is the present value of
the nominal minimum lease payments and the unguaranteed
residual value. The difference between the gross investment
and the net investment in the lease is recognised as unearned
finance income. Lease income is recognised as interest income
over the term of the lease using the net investment method,
which results in a constant rate of return on the investment.
270 Rabobank Jaarverslag 2016