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Deutsche EuroShop - Annual Report 2006

History:

Consolidated Balance Sheet Disclosures

12. Bank loans and overdrafts

in € thousand 31 Dec. 2006 31 Dec. 2005
Non-current bank loans and overdrafts 752,100 613,829
Current bank loans and overdrafts 28,529 50,505
  780,629 664,334

Since 2005, there have been extended disclosure requirements for financial instruments under IAS 39. In the consolidated financial statements of Deutsche EuroShop, this affects the recognition of bank loans and overdrafts, which must be classified as ”loans and receivables” and reported at amortised cost. In order to determine the fair value, i.e. the present value of a loan repayment obligation until the end of the fixedinterest period or earlier termination date under the BGB (German Civil Code), the bank loans and overdrafts were remeasured. To do so, the annuities due up to this time, together with any residual amount according to the redemption schedule, were discounted to the balance sheet date at market rates of interest plus a margin. The fair value of the bank loans and overdrafts at the balance sheet date amounts to €795,854 thousand.

Bank loans and overdrafts relate to loans raised to finance real property acquisitions and investment projects. Land charges on company properties amounting to €871,829 thousand (previous year: €679,774 thousand) serve as collateral.

Discounts are amortised over the term of the loan. In the year under review, €5,310 thousand (previous year: €4,651 thousand) was recognised in income.



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