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J. Other fixed 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 heading “Assets held for
own use”.
II Subsequent expenditure
Expenditure incurred to refurbish a property, that is accounted for
separately, is capitalised. Other expenditure is capitalised only when
it increases the future economic benefits of the property. All other
expenditure is recorded as costs on the income statement (see S II).
III Depreciation
Investment properties, whether land or constructions, are not depre-
ciated but posted at 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
on 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
indication showing that their book value will not be recoverable by
their use or disposal.
K. Finance lease receivables and real estate public-
private partnerships
I 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 instru-
ment provides hedging, 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 unrealised 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
on the income statement.
II Real estate public-private partnerships
With the exception of the police station in Dendermonde, consid-
ered as operational leasing and therefore recognised as investment
property, Public-Private Partnerships are classified as a finance lease
receivable and are subject to IFRIC 12. For the bookings, see point K I.
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 attrib-
utable 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
consideration paid, including directly attributable costs, is recognised
as a change in equity. Repurchased shares are presented as a deduc-
tion from the headings “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
attributable transaction costs. Subsequent to their initial recognition,
interest-bearing borrowings are stated at their amortised cost, with
any difference between cost and redemption value being recognised
on 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 calcu-
lation. Fixed-rate borrowings are expressed at their amortised cost. If,
however, interest on a fixed-rate borrowing is swapped into a floating
rate by virtue of a matching Interest Rate Swap derivative contract, in
conformity with fair value hedge accounting (IAS 39 § 86), the unamo-
rtised balance of the fixed-rate borrowing is stated at market value as
is the derivative itself (see F I).
The convertible borrowings are stated at their fair value at the closing
date.
O. Employee benefits
Contributions paid under the retirement pension defined contribution
system are recorded as charges insofar as employees provided the
services giving them the right to such contributions.
In Belgium, certain retirement pension systems based on defined
contributions, are subject to a legally guaranteed minimal return
by the employer and are therefore qualified as retirement pension
systems with defined benefit (see Note 11).
The cost of the retirement pension system with defined benefit
is determined by means of the projected credit units method and
actuarial evaluations are made at the end of each period when the
financial information is persented. The revaluations, comprising the
actuarial differences and return of the system’s assets (excluding
interests) are directly recorded in the statement of the financial posi-
tion, resulting in a debit or credit in the other elements of the global
result during the financial year in which they occur. The revaluation
under the other elements of the global result are directly recorded in
the retained earnings and will not be reclassified to net income.
Costs of past services are recognised in net income in the period in
which a system change occurs.
The net interest calculation is carried out by multiplying the net liabil-
ities of the accrued net benefits at the beginning of the period by the
actualisation rate.
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