annual report 2009 - bei der Hamborner REIT AG

Accounting and
valuation methods
Intangible assets
Intangible assets are valued at acquisition cost,
reduced by scheduled linear depreciations. The
depreciations correspond to the economic life,
which amounts to three to eight years.
Tangible fixed assets
Tangible fixed assets are valued at acquisition or
construction cost, reduced by scheduled linear
depreciations. We show proceeds from asset retirements
under the other operating income (profits)
or the other operating expenses (losses).
Properties held as a financial investment
Properties held as a financial investment are valued
by exercising the option in accordance with IAS 40
(30) in conjunction with (56) for amortised acquisition
or construction costs, taking into account linear
depreciations. All undeveloped and developed properties
as well as buildings and parts of buildings
which are held for the attainment of future rental
income, for the attainment of profits from appreciations
in value and/or for an as yet undetermined
use, are regarded as investment properties. They
are not intended for administrative purposes or for
short-term trade in the context of the normal business
activity. Scheduled depreciations are carried
out on a linear basis over the economic life. The
result from the sale of the "properties held as financial
investments" is presented in the profit and loss
account in a separate item.
For determination of the fair value to be indicated
in the notes to the financial statements in accordance
with IAS 40, we had our property portfolio
valued by an independent expert at the end of
2009 in accordance with internationally recognised
standards. Calculation of the property market values
was carried out by means of the discounted cash
flow (DCF) method. The cash flows to be expected
in each case for the respective property were determined
for a consideration period of eleven years
– 2010 to 2020 – within the DCF process. The
market value of properties results from the sum of
the discounted cash flows of the overall planning
period before tax plus the residual value also discounted
on the valuation date. Risk-adjusted interest
rates of 5.1 % to 8.35 % were applied for the dis-
to our sHareHolders management report Financial statements supplementary inFormation
counting. Please refer to the section "Performance
of the portfolio" in the management report for
further information.
Non-scheduled write-downs and write-ups
of intangible assets, tangible fixed assets and
properties held as a financial investment
The recoverability of the amounts stated in the balance
sheet is audited in sequence in the case of all
intangible assets, tangible fixed assets and properties
held as a financial investment. In addition, an
audit of assigned values is carried out if events or
changes to circumstances indicate that the book
value shown in the balance sheet no longer appears
achievable. Where the achievable amount of these
assets significantly falls below the book value on the
financial statement date, this is taken into account
by means of non-scheduled write-downs.
The net sales proceeds derived from an active
market or – if higher – the cash value of estimated
future cash flows from use are taken for the determination
of the achievable amount. In the case of
investment properties, the market value determined
by an expert constitutes the yardstick for the value
in use. If the reasons for non-scheduled write-downs
undertaken in previous years no longer exist, writeups
are applied up to the amortised book values.
The disclosure of non-scheduled write-downs is
carried out under the item "Amortisations of intangible
assets, tangible fixed assets and properties
held as a financial investment". Write-ups are
entered in the other operating income.
The result was reduced in the reporting year
through non-scheduled write-downs amounting to
€714,000 to adjust the reported residual book values
to the fair values applicable as of Dec 31, 2009. On
the other hand, a reversal of impairment adjustment
for €1,266,000 was made for properties subjected
to a non-scheduled write-down in previous years.
Financial assets
Financial assets are assessed at the fair value in their
first valuation, in conformity with IAS 39, which
takes into account the transaction costs on acquisition.
The subsequent assessment depends on the
category to which a financial asset is allocated.
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