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pursuant to ias 40 investment property property held as a financial investment is va 612408

IVG Immobilien AG (2007)

3. Changes to accounting [extract]

Valuation of investment properties in accordance with fair value method

Pursuant to IAS 40 (Investment Property) property held as a financial investment is valued upon acquisition at cost. Until 31 December 2006, the IVG Group carried out subsequent valuations of its investment properties in accordance with the cost model, by which investment properties were valued at cost less scheduled or extraordinary depreciation.

As the fair value method has now been established on capital markets as best practice for the subsequent valuation of investment properties, IVG switched to the fair value method on 1 January 2007. Pursuant to this method, the IVG Group will value its investment properties with their fair value at balance sheet date and changes in the market value of properties will be recognised in the income statement. The IVG Group believes that using the fair value method will improve presentation of assets in the balance sheet, as it reveals hidden reserves or charges. It provides greater transparency in the financial statements, raises comparability with competitors and is in line with best practice recommendations of the European Public Real Estate Association (EPRA).

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