ING Direct 2004 Annual Report Download - page 150

148 ING Group Annual Report 2004
Catastrophe and other insurance provision
ING Group carries provisions for that part of future losses from catastrophes and other extraordinary risks which are not reinsured.
Under US GAAP, these provisions are not allowed since such losses are recorded in the period they are incurred. Amounts that
were charged to, or released from, the catastrophe provision under ING Group accounting principles are recorded in the profit
and loss account under US GAAP.
Valuation and profit recognition of equity investments
This item relates to equity participations and certain equity investments. Equity participations that are held for sale are carried
at either the lower of cost or market value or at net asset value. Dividends received and realised gains and losses on the sale of
these shareholdings are charged to the profit and loss account. Under US GAAP, these shareholdings are accounted for at either
fair value with changes in fair value recorded in shareholders' equity, or, in cases where significant influence can be exercised by
the shareholders, by the equity method.
The criteria on recognition of gains and losses on the sale of certain equity investments are more stringent US GAAP. As a result,
profit on sale is not always recognised in the same accounting period.
Restructuring provision
Under ING Group accounting principles, certain restructuring costs relating to employee terminations are recognised when a
restructuring plan has been announced.
Under US GAAP, liabilities related to exit costs are recognised when incurred. Employee termination costs are generally
considered to be incurred when the company has a liability to the employee unless further service is required from the
employee in which case costs are recognised as benefits are earned.
NOTES TO DIFFERENCES BETWEEN ING GROUP
ACCOUNTING PRINCIPLES AND US GAAP
(continued)
2.3
ADDITIONAL FINANCIAL
INFORMATION