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T. Income tax
The income tax of the financial year comprises the current tax. The
income tax is recognised on the income statement except to the
extent that it relates to items recognised directly under equity. The
current tax is the expected tax payable on the taxable income of the
past year, using the tax rate enacted at the closing date, and any
adjustment to taxes payable in respect of previous years.
U. Exit tax and deferred taxes
The exit tax is the tax on the gain that arises upon approval of a
Belgian non-RREC as an RREC or merger of a non-RREC with an RREC.
When the non-RREC, which is eligible for this regime, first enters the
consolidation scope of the Group, a provision for an exit tax liability
is recorded simultaneously with a revaluation gain on the property
corresponding to the market value of the property, and taking into
account a forecasted date of merger or approval. Any subsequent
adjustment to this exit tax liability is recognised on the income
statement. When the approval or merger takes place, the provision
becomes a debt and any difference is also recognised on the income
statement.
The same treatment is applied mutatis mutandis to French companies
eligible for the SIIC regime and to Dutch companies eligible for the FBI
regime.
When companies not eligible for the RREC, SIIC or FBI regimes are
acquired, a deferred tax is recognised on the unrealised gain of the
investment property.
V. Stock options
Equity-settled share-based payments to employees and executive
committee members are measured at the fair value of the equity
instruments at the date of granting. Details regarding the determina-
tion of the fair value of equity-settled share-based transactions are
set out in Note 44.
W. Estimates, judgments and main sources of concern
I Fair value of the property portfolio
Cofinimmo’s portfolio is valued quarterly by real estate experts. This
valuation by real estate experts is intended to determine the market
value of a property at a certain date, taking into account the market
evolution and the characteristics of the property. In parallel to the
work of the real estate experts, Cofinimmo proceeds with its own
valuation of its assets with a view on their long-term operation by its
teams. The portfolio is recorded at the fair value established by the
real estate experts in the Group’s consolidated accounts.
II Financial instruments
The fair value of the Group’s financial instruments is calculated on
the basis of the market values in the Bloomberg software
1
. These fair
values are compared with the quarterly estimations received from the
banks, and major variations are analysed.
More details are given in Note 24.
III Goodwill
Goodwill is calculated at the acquisition date as the positive differ-
ence between the acquisition cost and Cofinimmo’s share in the net
asset acquired. Such goodwill is then the subject of an impairment
test by comparing the net book value of the groups of buildings with
their value in use. The calculation of the value in use is based on
assumptions of future cash flows, indexation rates, cash flow years
and residual values.
More details are given in Note 20.
IV Transactions
When acquiring a portfolio through the purchase of company shares,
the Group takes into account the percentage of shares held and the
authority to appoint Directors for determining joint or overall control.
When a property portfolio meets the definition of a business combi-
nation as defined under IFRS 3, the Group restates the assets and
liabilities acquired in the context of the business combination at
their fair value. The fair value of the property assets of the business
combination is determined based on the value given by the real
estate experts.
More details are given in Note 43.
1
The data provided by Bloomberg result from price observations relating to actual transactions and the application to these observations of valuation models developed in the
scientific literature
(www.bloomberg.com).
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