Notes to the combined balance sheet
and statement of earnings of the real estate companies
In 1988 the real estate companies were given increased autonomy.
From October 10, 1988 onward, a combined balance sheet and statement of earnings, together with
notes, have been prepared for the real estate companies. For a list of these real estate companies the
reader is referred to page 34.
In order to better align the book value of real estate with the market value, it was decided to make a one
time revaluation of the relevant real estate as of October 10, 1988. The capital gain resulting from this
revaluation, net of deferred taxes, was added to the revaluation reserve forming a part of stockholders'
equity.
Real estate acquired with the Gall Gall and Party Shop chain in 1989 has been separated from the
retail activities and has been included in these combined statements.
General
The valuation of assets, stockholders' equity, provisions and liabilities and the determination of earnings
are based on cost, taking into account the revaluation of real estate in 1988. Unless otherwise indicated
for specific items, all components of assets, stockholders' equity, provisions and liabilities are stated at
their face values.
Income taxes
The income taxes for the year under review are determined based on earnings reported in the statement
of earnings, adjusted for 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 Tangiblefixed assets
Real estate is stated at acquisition - or historic - cost including interest paid during construction, taking
into account the revaluation in 1988, net of 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
Other fixed assets 6-8 years
In this revaluation the difference between market value and book value, net of deferred taxes, was added
to the revaluation reserve. The revaluation is considered realized upon sale of the relevant real estate and
this is shown accordingly in the statement of earnings.
Investment in subsidiary
The subsidiary is stated at net asset value.
Provision for deferred income taxes
Adjustments to taxes - arising from temporary differences between reported earnings and fiscal income
including the deferred tax liabilities arising from the revaluation of real estate - are based on the tax rates
prevailing at the end of the fiscal year. The differences arising from changes in tax rates are charged or
credited directly to stockholders' equity. The balance is stated at face value.
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General
Accounting principles
