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Consolidated Financial Statements as of December 31, 2015
Notes to the Consolidated Financial Statements
Investment property
6.4
Accounting policies
IAS
40 –
Investment Property
defines investment property as property
The rewards granted by the Group under its leases are an integral part
(land or a building or both) held to earn rentals or for capital
of the net rental revenue and are recognized over the lease term
appreciation or both. Based on this definition, investment property
(Note 6.2).
held by the Group consists of shopping malls (retail and service units
The fair value of investment property is measured twice a year
located behind the stores’ check-out area) that are exclusively or jointly
by applying a multiple that is a function of (i) each shopping mall’s
●
owned or subject to a finance lease and represent a surface area of at
profitability and (ii) a country-specific capitalization rate, to the
least 2,500
square meters. These assets generate cash flows that are
gross annualized rental revenue generated by each property; or
largely independent of the cash flows generated by the Group's other
retail assets.
by obtaining independent valuations prepared using two methods:
●
the discounted cash flows method and the yield method. Valuers
Investment property is recognized at cost and is depreciated over the
generally also compare the results of applying these methods to
same period as owner-occupied property (Note 6.2).
market values per square meter and to recent transaction values.
Rental revenue generated by investment property is reported in the
In view of the limited external data available, particularly concerning
income statement under "Other revenue" on a straight-line basis over
capitalization rates, the complexity of the property valuation process
the lease term.
and the fact that valuations are based on passing rents for the Group’s
own properties, the fair value of investment property is considered as
being determined on the basis of level 3 inputs.
December 31, 2015
December 31, 2014
(in millions of euros)
Investment property at cost
529
435
Depreciation and impairment
(146)
(139)
TOTAL INVESTMENT PROPERTY, NET
383
296
CHANGES IN INVESTMENT PROPERTY
(in millions of euros)
At December 31, 2013
313
Depreciation for the period
(13)
Translation adjustment
1
Acquisitions for the period
74
Disposals for the period
(1)
(89)
Transfers and other movements
9
At December 31, 2014
296
Depreciation for the period
(19)
Translation adjustment
(14)
Acquisitions for the period
41
Disposals for the period
(14)
Transfers and other movements
93
At December 31, 2015
383
Disposals for 2014 concerned investment properties in Spain.
(1)
Rental revenue generated by investment property, reported in the The estimated fair value of investment property at December 31, 2015
income statement under "Other revenue", totaled 64.9 million euros
was 696 million euros (December 31, 2014: 753 million euros).
in 2015 (2014: 59.6
million euros). Operating costs directly
attributable to the properties amounted to 10.4 million euros (2014:
6.8 million euros).
2015 REGISTRATION DOCUMENT
183