ING Direct 2015 Annual Report Download - page 47

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Notes to the Consolidated annual accounts of ING Bank - continued
Property and equipment
Property in own use
Land and buildings held for own use are stated at fair value at the balance sheet date. Increases in the carrying amount arising on
revaluation of land and buildings held for own use are credited to the revaluation reserve in shareholders’ equity. Decreases in the
carrying amount that offset previous increases of the same asset are charged against the revaluation reserve directly in equity; all
other decreases are charged to the profit and loss account. Increases that reverse a revaluation decrease on the same asset
previously recognised in net result are recognised in the profit and loss account. Depreciation is recognised based on the fair value and
the estimated useful life (in general 20–50 years). Depreciation is calculated on a straight-line basis. On disposal the related
revaluation reserve is transferred to retained earnings.
The fair values of land and buildings are based on regular appraisals by independent qualified valuers or internally, similar to
appraisals of real estate investments. Subsequent expenditure is included in the asset’s carrying amount when it is probable that
future economic benefits associated with the item will flow to ING Bank and the cost of the item can be measured reliably.
Property obtained from foreclosures
Property obtained from foreclosures is stated at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less applicable variable selling expenses. Property obtained from foreclosures is included in
Other assets - Property development and obtained from foreclosures.
Property development
Property developed and under development for which ING Bank has the intention to sell the property after its completion is included in
Other assets – Property development and obtained from foreclosures.
Property developed and under development for which ING Bank has the intention to sell the property under development after its
completion and where there is not yet a specifically negotiated contract is measured at direct construction cost incurred up to the
balance sheet date, including borrowing costs incurred during construction and ING Bank’s own directly attributable development and
supervision expenses less any impairment losses. Profit is recognised using the completed contract method (on sale date of the
property). Impairment is recognised if the estimated selling price in the ordinary course of business, less applicable variable selling
expenses is lower than carrying value.
Property under development for which ING Bank has the intention to sell the property under development after its completion and
where there is a specifically negotiated contract is valued using the percentage of completion method (pro rata profit recognition). The
stage of completion is measured by reference to costs incurred to date as percentage of total estimated costs for each contract.
Property under development is stated at fair value (with changes in fair value recognised in the profit and loss account) if ING Bank has
the intention to recognise the property under development after completion as real estate investments.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the assets is depreciated on a
straight line basis over their estimated useful lives, which are generally as follows: for data processing equipment two to five years,
and four to ten years for fixtures and fittings. Expenditure incurred on maintenance and repairs is recognised in the profit and loss
account as incurred. Expenditure incurred on major improvements is capitalised and depreciated.
Assets under operating leases
Assets leased out under operating leases in which ING Bank is the lessor are stated at cost less accumulated depreciation and any
impairment losses. The cost of the assets is depreciated on a straight-line basis over the lease term.
Disposals
The difference between the proceeds on disposal and net carrying value is recognised in the profit and loss account under Other
income.
Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use. Borrowing costs are determined at the weighted average cost of capital of the
project.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date.
ING Bank Annual Report 2015 45