the component method is applied based on the recommendations of the f eacute d eacut 612406

Klépierre (2010)

2. Accounting principles and methods [extract]

2.10 Investment property [extract]

2.10.1 Cost model [extract]

2.10.2 The component method [extract]

The component method is applied based on the recommendations of the Fédération des Sociétés Immobilières et Foncières (French Federation of Property Companies) for components and useful life:

Four components have been identified for each of these asset types (in addition to land):

• structures;
• facades, cladding and roofing;
• general and Technical Installation (GTI);
• fittings.

Components are broken down based on the history and technical characteristics of each building.

For the first-time adoption of the components method, the historic cost of the property concerned is calculated on the basis of the percentage [QP] attributed to each component at the reappraisal values of January 1, 2003, which have been adopted as the presumed cost price.

All component figures are based on assumed “as new” values. Klépierre has therefore calculated the proportions applied to “fittings”, “General and Technical Installations” and “facades” at January 1, 2003 on the basis of the useful life periods shown in the table above, calculated from the date of construction or latest major refurbishment of the property. The percentage for “structures” is calculated using the figures shown for the other components, and is amortized over the residual term set by the appraisers in 2003.

Purchase costs are divided between land and buildings. The proportion allocated to buildings is amortized over the useful life of the structures. The residual value is equivalent to the current estimate of the amount the company would achieve if the asset concerned were already of an age and condition commensurate with the end of its useful life, less disposal expenses.