Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006 Notes_Notes to the consolidated balance sheet – Assets
(16) Non-current assets and disposal groups held for sale
At the end of November 2006 – upon conclusion of a bidding process
– the Munich Re Group contractually committed to sell both investment
and owner-occupied property in Germany with a total book
value of €918m. The assets concerned, and the share of the provision
for deferred premium refund and the deferred taxes apportionable to
them, have been classified in disposal groups as “held for sale”. The
items involved are commercial and residential buildings located
mainly in large cities but also in medium-sized centres.
At the time of classification, no income or expense was recognised
because the sale prices less the costs to sell of the items were
higher than the Group’s carrying amounts. Subsequent valuation at
the balance sheet date did not give rise to any recognised income or
expense either.
Items for which ownership was transferred before the end of the
financial year and which were therefore no longer recognised at the
balance sheet date involve investment property amounting to €82m
and owner-occupied property totalling €50m.
In the segment reporting, the disposal groups are recognised in the
segments life and health and property-casualty.
In December 2005, ERGO Versicherungsgruppe AG signed agreements
with GFKL Financial Services AG under which the latter would
A large proportion of the contractually committed items are still
recognised in the Group balance sheet at the reporting date, because
the transfer of ownership did not or will not take place until the financial
year 2007.
Besides this transaction, the Munich Re adopted a plan in 2006 to
sell its majority stake in the closed-end real estate fund OIK Mediclin.
The fund is the owner of 21 hospital properties, which are recognised
in the consolidated balance sheet as investment property with a
carrying amount of €444m. The active marketing of the stake began
in the fourth quarter of 2006. Thereupon, the assets and liabilities of
the fund were combined in a disposal group and classified as “held
for sale”. Neither the first-time valuation of the disposal group at the
date of classification nor its subsequent valuation at the balance
sheet date gave rise to any recognised income or expense. Our
shares in the fund are expected to be sold in the business year 2007.
Balance sheet items relating to disposal groups at the reporting date
Assets
All figures in €m 31.12.2006 Prev. year *
B. Investments
I. Land and buildings, including buildings on third-party land
Thereof:
4,720 5,798
– Investment property held for sale 1,164 –
H. Deferred tax assets
Thereof:
5,370 5,213
– Deferred tax assets relating to disposal groups 16 –
I. Other assets
Thereof:
3,541 3,964
– Owner-occupied property held for sale 66 –
Total assets relating to disposal groups 1,246 –
Liabilities
All figures in €m 31.12.2006 Prev. year *
C. Gross technical provisions
IV. Other technical provisions
Thereof:
10,835 10,534
– Provision for deferred premium refunds relating to disposal groups
F. Liabilities
–169 –
III. Other liabilities
Thereof:
10,015 12,288
– Amounts due to banks relating to disposal groups 231 –
G. Deferred tax liabilities
Thereof:
8,156 7,201
– Deferred tax liabilities relating to disposal groups 65 –
Total liabilities relating to disposal groups 127 –
* Adjusted owing to first-time application of IAS 19 (rev. 2004).
acquire its majority stake in the ADA-HAS Group, an IT systems
specialist. The governing bodies and cartel authorities have given
the formal approvals still outstanding when the agreements were
signed, so that the sale was completed in the first quarter of 2006.
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