annual report - Royal Haskoning

explanatory notes
financial review
Financial instruments
The securities and derived financial instruments included under the financial fixed assets and current assets are valued at
market value. All the remaining financial instruments included in the balance sheet are valued at cost price (i.e. the nominal
value, unless stated otherwise).
Where derived financial instruments have been designated as instruments for covering risks, changes in value are directly
charged or credited to the revaluation reserve in the equity capital until the covering instrument expires or is sold. In that
case, the cumulative result is transferred to the profit and loss account.
Work in hand
Time and money spent on orders and commissions that have not yet been invoiced at the balance sheet date are booked
under work in hand. The time spent is charged to the projects at the applicable rates. The rates are based on the integral
cost price. For the projects where the profit on the work already carried out can be determined in a responsible manner,
profit is recognised for work in hand on the basis of the percentage of completion method. Provisions have been made
for recognised risks and expected losses on projects. Provisions for expected losses are taken in the period in which it
is established that there are loss-making projects, and are charged to the work in hand item. The installments due are
also charged to the work in hand item. Payments in advance are included as financing advances received under current
liabilities.
Receivables
Receivables are valued at nominal value less a provision for bad debts. The necessary provision for bad debts is determined as
follows. A provision of 50 percent is made for Receivables more than 180 days old and of 100 percent percent for receivables
older than 360 days, unless written payment guarantees have been presented.
Cash in hand and at bank
Cash in hand and at bank is valued at nominal value less a provision for currencies that are not freely transferable.
Third party share
The share of third parties in the group capital is valued at the sum of the net interest in the group companies concerned.
Where the group company concerned has a negative net asset value, the negative value together with any further losses
is not charged to the third party share unless the third party shareholders have an actual liability and are able to take the
losses for their own account.
Provisions – general
Provisions are created for legally enforceable or actual liabilities that exist at the balance sheet date and for which it is likely
that an outflow of resources will be necessary and for which the magnitude can be estimated in a reliable manner. The
provisions are valued at the best estimate of the sums necessary to settle the liabilities at the balance sheet date.
56