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Annual Accounts /
Notes to the Consolidated Accounts
of the lease payments sold will be recognised under the item “Writeback
of lease payments sold and discounted” of the income statement.
The changes in the fair value of the property will be recorded separately
under the item “Changes in the fair value of investment properties” of the
income statement.
J. Other assets
I Assets held for own use
In accordance with the alternative method allowed by IAS 16 § 31, the part
of the property used by the company itself as headquarters is stated at its
fair value. It appears under the item “Assets held for own use”.
II Subsequent expenditure
Expenditure incurred to refurbish a property that is accounted for sep-
arately, is capitalised. Other expenditure is capitalised only when it
increases the future economic benefits of the property. All other expendi-
ture is recorded as costs under the income statement (see S II).
III Depreciation
Investment properties, whether land or constructions, are not depreciated
but recorded at their fair value (see G).
Depreciation is charged to the income statement on a straight-line basis
over the estimated useful lives of the following items:
•
fixture and fittings: 4-10 years;
•
furniture: 8-10 years;
•
computer hardware: 4 years;
•
software: 4 years.
IV Assets held for sale
Assets held for sale (investment properties) are presented separately in
the balance sheet at a value corresponding to their fair value.
V Impairment
The other assets are subject to an impairment test only if there is an indi-
cation showing that their book value will not be recoverable by their use
or disposal.
K. Finance lease receivables
Finance lease receivables are valued based on their discounted value at
the interest rate prevailing at the time of their issue. If they are indexed to
an inflation index, this is not taken into account in the determination of
the discounted value. If a derivative financial instrument provides hedg-
ing, the market interest rate for this instrument will serve as a reference
rate for calculating the market value of the receivable at the close of each
accounting period. In this case, the entire unrealised gain generated by
the valuation at market value of the receivable is limited to the unreal-
ised loss relating to the valuation at market value (see F I) of the hedging
instrument.
Conversely, any unrealised loss generated by the receivable will be entirely
recorded under the income statement.
L. Cash and cash equivalents
Cash and cash equivalents comprise current accounts, cash and short-
term investments.
M. Shareholders’ equity
I Ordinary shares
Ordinary shares are classified as equity. External costs directly attribut-
able to the issue of new shares are shown as a deduction, net of tax, of
the proceeds.
II Preference shares and mandatory convertible bonds
Preference share and mandatory convertible bond capital is classified as
equity if it meets the definition of an equity instrument under IAS 32.
III Repurchase of shares
When own shares are repurchased by the Group, the amount of the con-
sideration paid, including directly attributable costs, is recognised as
a change in equity. Repurchased shares are presented in deduction of
the items “Capital” and “Share premium account”. The proceeds on sales
of own shares are directly included under equity without impacting the
income statement.
IV Dividends
Dividends are recognised as debt when they are approved by the General
Shareholders’ Meeting.
N. Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at cost, less attrib-
utable transaction costs. Subsequent to their initial recognition, inter-
est-bearing borrowings are stated at their amortised cost, with any
difference between cost and redemption value being recognised under
the income statement over the period of the borrowings on an effective
interest rate basis. Upfront fees payable to lenders or legal fees are for
example integrated into the effective interest rate calculation. Fixed-rate
borrowings are expressed at their amortised cost. If, however, a fixed-rate
borrowing is swapped into a floating-rate borrowing by virtue of a match-
ing Interest Rate Swap derivative contract, in conformity with fair value
hedge accounting (IAS 39 § 86), the change in the fair value of the Swap
in the income statement is compensated by the adjustment of the book
value of the fixed-rate borrowing (see F I).
The convertible borrowings are stated at their fair value at the closing date.
O. Employee benefits
The Group funds a defined contribution pension scheme for its employees
which is entrusted to an insurance company and thus independent from
the Group. Contributions paid during the accounting period are charged to
the income statement.
P. Provisions
A provision is recognised in the balance sheet when the group has a legal
or contractual obligation resulting from a past event, and if it is likely that
resources will be required to settle the obligation. Provisions are deter-
mined by discounting the expected future cash flows at the market rate
reflecting, where appropriate, the risk specific to the liability.
Q. Trade debts and other debts
Trade debts and other debts are stated at cost.