1989
1988
1.9155
1.9995
2.0953
1.8713
2.1800
1.9580
2.1733
2.1145
2.0457
1.9877
36
Accounting principles General
The valuation of assets, stockholders' equity, provisions and liabilities and the determination of earnings
are based on historic cost. Unless otherwise indicated for specific items, all components of assets, stock
holders equity, provisions and liabilities are stated at their face values.
Some additional information based upon the current value may be found on page 47.
Fiscalyear
Fiscal years end on the Sunday nearest to December 31 of the calendar year. Fiscal 1989 contained 52
weeks (1988: 52 weeks).
Foreign exchange
Receivables and liabilities in foreign currencies, resulting from ordinary activities are translated at the
prevailing rates of exchange. The resulting exchange differences are added or charged to the statement of
earnings.
In the consolidation, subsidiaries' balance sheets denominated in currencies other than guilders are
translated at the rates of exchange prevailing at the end of the fiscal year; the amounts on the statements
oi earnings denominated in currencies other than guilders are translated per quarter at an average rate of
equity1*'6 ^Uarter' "1G resu'ting exchange differences are added or charged directly to stockholders'
The rates of exchange applied for the dollar are:
Balance sheet:
Year end rate
Statement of earnings:
1st quarter
2nd quarter
3rd quarter
4th quarter
Income taxes
The income taxes for the year under review are determined based on the earnings reported in the state
ment of earnings, adjusted for permanent differences between income as calculated for financial and tax
reporting and the tax rates prevailing for the said year.
Deferred tax liabilities arising from temporary differences between income as calculated for financial
and tax reporting are balanced and included under 'Provision for deferred income taxes'.
The actual taxation due is included under 'Current liabilities'.
Balance sheet Receivables/loans
Receivables and loans have been included at face value less provisions deemed necessary.
Inventories
Inventories have been valued at historic cost or manufacturing cost based on the FIFO method or at their
market value if this is lower. A reduction has been made for the risk of obsolescence and a possible
decline in raw material prices has been allowed for.
Tangible fixed assets
Valuation takes place on the basis of cost, less depreciation. Depreciation according to the straight-line
method is calculated on the basis of the estimated average life, taking into account the residual value-
Buildings 30-40 years
Machinery and equipment 8 years
Other fixed assets
(incl. renovations) 8 years
'Buildings' also include the capitalized leases for real estate in the United States. Amortization takes place
according to the straight-line method in accordance with the length of the agreements.
