Annual Report 2023 (eng) - Flipbook - Side 32
INDUSTRIENS PENSIONSFORSIKRING A/S ÅRSRAPPORT 2023
NOTES
investment units, to unlisted bonds, and to the owner-
rate is calculated according to the cost-of-capital
certain elements of the normal return, in particular the
the company, and the value of the liability can be
occupied property.
method, which combines a risk-free interest rate with
market rent and the annual costs of maintenance.
measured reliably.
the addition of an illiquidity premium and the expected
Valuation of investment properties and wind turbines in
inflation rate. The DCF model is maintained by external
The estimates are by nature uncertain. New information
Financial
group undertakings and associated undertakings is
experts, and, as a supplement to their valuation, a
and/or future events may therefore lead to changes in
instruments are recognised on the trading day. At initial
based on the present value of expected cash flows
statement from another external expert is obtained
these estimates and consequently also in the
recognition,
during a planning period of 10 years for investment
every year concerning the market conformity of the
calculated fair values.
measured at cost, while other assets and liabilities are
properties and up to 30 years for wind turbines. For
model and the assumptions applied.
instruments
intangible
and
and
derivative
tangible
financial
assets are
measured at fair value. Measurements after initial
investment properties, the method (discounted cash
For a more detailed description of the valuation in this
recognition take place as described for each item
flow (DCF)) is defined in an annex to the Executive
To a great extent, the valuations of unlisted equity
area, see the section on investment assets and note 22,
below.
Order on the Presentation of Financial Statements. The
investments in private equity funds and real estate
which includes a breakdown of investment assets and
unpredictable risks and losses that arise before the
most significant estimates concern determination of the
funds etc., unlisted investment units and unlisted bonds
financial liabilities according to the fair value hierarchy
annual report is presented, and which confirm or
discount rate, which is composed of an individual rate
are based on information from the funds themselves or
(levels 1-3) as well as a breakdown and further
disconfirm conditions that existed on the reporting
of return and the expected inflation rate, as well as
from capital managers etc., including information in
information on the valuation etc. of level 3 assets.
date, are taken into account.
certain elements of the budgeted cash flows, in
reports, many of which were prepared prior to the
particular budgeted rental income which depends on
reporting
Intragroup transactions
Foreign currency translation
the level of the rent and vacant periods etc., expenses
established to ensure the quality of the information
Transactions between group undertakings are made
Transactions denominated in foreign currencies are
for maintenance and renovation as well as a so-called
included in measurement of fair value. This means that
on the basis of written agreements and settlement is on
translated at the exchange rate ruling at the transaction
terminal value when the planning period expires. The
temporal differences in accounting data between the
a cost-recovery basis or on commercial market terms.
date. Gains and losses that arise between the
determination of the individual rate of return is based
most recent reporting and the reporting date are taken
on statistics on actual real estate transactions involving
into account; that additional information is obtained
similar properties and takes into consideration the
from selected funds and capital managers; that internal
location of the property, its age, use and state of
date.
Internal
procedures
have
been
For
recognition
and
measurement,
exchange rate at the transaction date and the
settlement date are recognised in the income
information on large transactions in individual funds is
General notes regarding principles for
recognition
and measurement
maintenance, etc. As a supplement to this valuation, a
continuously
market
Revenues and costs are recognised in the income
the reporting date. Similarly, currency adjustments
valuation from an external estate agent is obtained
developments since the most recent reporting are
statement as they are earned or incurred. All value
arising between the date of the transaction and the
every year concerning the assumptions applied
evaluated; and that the quality of the reporting received
adjustments, both
reporting date are also recognised in the income
(primarily individual rates of return), and the fair value is
is generally followed up on (back test).
therefore recognised in the net profit or loss for the
collected;
that
general
realised and unrealised, are
year. However, special rules apply to value adjustments
calculated every three years.
The fair value of owner-occupied property is calculated
of owner-occupied properties, and under certain
The extensive planning period of up to 30 years for
using a returns model which is also defined in an annex
conditions these adjustments are recognised under
wind turbine investments naturally adds to the
to the Executive Order on the Presentation of Financial
other comprehensive income, see the principles for
uncertainty
and
Statements. According to this model, fair value is
measurement of owner-occupied properties.
consequently also concerning the current fair value of
calculated on the basis of the budgeted, normal
the wind turbines. Again, the most significant estimates
operating return on the property, consisting of the
Assets are recognised in the balance sheet when it is
relate to the discount rate and to specific elements
market rent less costs of operation and maintenance,
probable that future economic benefits will flow to the
which have a major impact on budgeted cash flows, in
as well as a required rate of return for the type of
company and the value of the asset can be reliably
particular electricity production, which is based on wind
property in question.
measured.
forecasts, idle days with no generation of electricity,
adjusted by any non-recurring income and expenses
electricity price developments, costs of maintenance of
not included in the normal return, e.g. deferred
A liability is recognised in the balance sheet when it is
the wind turbines and costs of dismantling the wind
maintenance works. The most significant estimates
probable that future financial benefits will flow out of
turbines at the end of their useful lives. The discount
relate to the individual required rate of return as well as
concerning
future
cash
flows
The fair value calculated is
statement. Monetary assets and liabilities in foreign
currency are translated at the exchange rate ruling on
statement under value adjustments.
Income statement and statement of
comprehensive income
Income from insurance activities
Premiums, net of reinsurance
Includes premiums and contributions due in the
financial year. Labour-market contributions and A tax
withheld are deducted from the premium income.
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