Property and equipment
a. Property for use by the Bank
The bank premises are stated at current value,
based on cost of replacement.
The buildings are depreciated by the straight-
line method over their estimated useful life with
a maximum of 50 years.
Movements in value, less taxation on them, are
credited or charged to the Revaluation reserve.
b. Property not for use by the Bank
Properties held for sale are stated at the lower of
costs incurred on them less depreciation and the
probable proceeds from their sale.
c. Equipment and computer installations
Equipment is generally written off entirely in the
year of acquisition.
The computer installations are stated at cost less
depreciation; depreciation is by the straight-line
method on the basis of estimated useful life, with
a maximum of five years.
d. Investment premiums
The amount of investment premiums received
in respect of future years is included in the
balance sheet under Creditors.
Investment premiums are released to the profit
and loss account and included in Depreciation
over the life of the assets concerned.
Provisions
Provisions are included in Creditors and are
stated at face value with the exception of Group-
managed pension provisions and the provision
for voluntary early retirement, which have been
stated at their discounted value.
a. Provision for general contingencies
Pursuant to Section 11 (2) of the Act on the
Supervision of the Credit System, a provision
has been formed to cover the general risks
inherent in lending and other banking activities,
engaged in directly or through subsidiaries and
associated companies.
This provision is mainly charged with amounts
in respect of diminutions in value of receivables.
The balance sheet items concerned are reduced
by the amount of these specific provisions..
The annual appropriation to the Provision for
general contingencies charged to the profit and
loss account is based on the amount of risk-
bearing assets and contingent liabilities, and the
risks inherent therein. Each year, the amount
added to the Provision for general contingencies
is compared with the charge against the
Provision and reviewed in the light of the way in
which the risks are expected to develop.
b. Provisions for pensions
The pension rights of staff employed in the
Netherlands and of expatriated staff are entirely
insured with separate pension funds. For the
majority of staff employed abroad, pension or
other superannuation arrangements have been
made in accordance with the regulations and
practices of the countries involved, most of these
arrangements being insured with underwriters.
Annually, the premiums paid are charged to the
result. For the arrangements not insured with
underwriters provisions are made either on the
basis of actuarial calculations using local interest
rates or at the face value of the benefits
anticipated where these benefits are payable
directly upon severance.
The annual appropriation to this provision
charged to the result is determined on the basis
of the rights which have arisen in the year under
review.
c. Provision for voluntary early retirement
This provision is formed for employees in the
Netherlands who have already taken early
retirement at the year-end and for those who
have opted in the year under review to avail
themselves of the possibility of early retirement.
d. Provision for deferred taxation
This provision relates to future taxation
liabilities resulting from the book value of
certain assets being in excess of their fiscal value
or the fiscal value of certain liabilities being
higher than their book value.
Deferred taxation is calculated at the rates on
the balance sheet date.
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