76 Investment properties
77 Other assets
Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
Investment properties are stated at cost.
in millions of euros 2015 2014
Opening balance 452 1,055
Purchases 4 609
Sales (44) (1,051)
Depreciation (11) (10)
Impairments (25) 13
Other 5 (164)
Closing balance 381 452
The fair value approximates the carrying amount
(2014: approximated the carrying amount)
Cost 774 810
Accumulated depreciation and impairments (393) (358)
Net carrying amount 381 452
Real estate projects
in millions of euros 2015 2014
Building sites and equalisation funds 1,206 1,227
Work in progress 488 426
Completed developments 324 318
Total real estate projects 2,018 1,971
External valuations of the investment properties were
performed by duly certified external parties in accordance
with RICS valuation standards or other equivalent standards.
The investment properties are valued, for the determination
of fair value, on the basis of the methodologies which are the
most appropriate for the property in question. This includes the
discounted cash flow valuation method and the capitalisation
based on net initial yields for comparable transactions.
For the internally valued real estate investments in-house real
estate expertise is used. In 2014,84% of appraisals were carried
out by certified staff of Rabo Real Estate Group. Investment
properties valued internally are typically measured using
a discounted cash flow valuation technique.
Real estate stocks are valued at the lower of cost or net
realisable value. The net recoverable value of the building sites
and equalisation funds is the highest of the direct yield amount
and the indirect yield amount.The direct yield amount is the
estimated value of sale less the estimated costs of completing
the sale. The indirect yield value is the estimated yield based
on ordinary business operations less the estimated costs of
completion and the estimated costs necessary to complete the
sale, whereby the estimated cash flows are discounted at the
weighted average capital base. In determining the weighted
average capital base, the bank factors in expected capital,
timing of cash flows, operational risk and certain conditions
specific to Rabobank Real Estate Group.
Rabobank uses assessments and estimates to determine both
direct and indirect recoverable value. In determining direct
and indirect yield, risks related to current land operations, sites
not subject to a zoning plan, and equalisation funds, including
demographic trends, location, use and the elaboration of
development plans and administrative decision-making, are
incorporated on a location specific basis as much as possible.
For individual locations this results in expected movements in
land and house prices, expected margins per home, and other
variables, which ultimately determine the direct and indirect
yield amount.
For individual plots and sites, the net recoverable value is
determined by comparing the direct and indirect yield amounts
with each other. For plots of land ready for construction and
current land operations, net recoverable value is generally
equal to the indirect yield amount. For the other categories,
both the direct and the indirect yield amount may have been
decisive in determining the net recoverable value. Under such
circumstances the direct yield amount is generally used more
often the longer it takes to begin construction.
The risk of deviations from assessments and estimates is
generally greater for sites not subject to a zoning plan than
for sites which are subject to a zoning plan, whereby the
risk of deviations further increases if the commencement of
construction is expected to be delayed.
Valuations
2015 2014
External valuations 100% 44%
Internal valuations 0% 56%
in millions of euros
Note
2015
2014
Receivables and prepayments
2,217
1,535
Accrued interest
1,500
1,599
Precious metals, goods and
warehouse receipts
1,320
1,495
Real estate projects
2,018
1,971
Accrued income
379
101
Employee benefits
25
7
6
Other assets
558
1,853
Total other assets
7,999
8,560
226 Rabobank Annual Report 2015
