Accounting policies for the consolidated financial statements
Settlements and curtailments during the year are recognized in the income statement in the year in which they occur. A pro-rata share of unrecognized gains and losses is recognized immediately if curtailments occur. Under the defined contribution plan, the Company pays contributions to publicly or privately administered insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Other long-term employee benefits In addition to fixed annual income, all employees have a variable income component. The variable component is expressed as a percentage of fixed annual income. The percentage awarded depends on the realization of preset targets. The seniority of the employees concerned determines the range set for the variable income percentage. If the absolute amount of variable income exceeds a threshold, it is partially postponed over several years. The Company also has a staff option plan in place for its employees in the Netherlands as well as a management option plan. The costs of these option plans are borne in full by the Company and have no impact on the annual performance of the funds. The costs are recognized as employee benefits by the Company at the date of granting as these are fully vested from that date of granting. The estimated fair value of the options is calculated using the Cox, Ross & Rubinstein model, which is closely related to the methodology of the Black & Scholes option valuation model. Since 1 January 2010, no options have been granted on funds managed by the Company. The last options will expire in 2014 at the latest. The Company has a Long-term Incentive Plan for key employees. Until 2010, the plan is an Equity Notes Plan eligible for certain employees. These equity notes are recorded at a value that is related to the Company’s valuation basis of profit from continuing operations, adjusted downwards for expenses related to the Long-term Incentive Plan and adjusted for the results related to the foreign currency hedge.
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Annual Report ROBECO GROEP N.V.
2012
Equity notes are vested according to a specific timetable or subject to pre-defined conditions, but generally they mature between four and six years after being granted. Based on the fact that the Equity Notes Plan is a long-term employee benefit plan as bonuses are vested and paid over one year after the period in which they are earned, the projected unit credit method is applied for accounting purposes. This leads to a straight-line allocation of the total expected amount of the benefit over the vesting period. Equity notes are recorded in the income statement after being granted to key employees. Since 2011, a new Long-term Incentive Plan for key employees is in place. This plan is a Cash Appreciation Rights (CARs) Plan for which certain employees are eligible. These CARs are recognized at a value related to the Company’s valuation basis for profit from continuing operations, including results from foreign currency hedges and excluding performance fee income. CARs are vested according to a specific timetable or subject to predefined conditions, but generally they mature between three and five years after being granted. Based on the fact that the CARs Plan is a long-term employee benefit plan, as bonuses are vested and paid more than one year following the period in which they are earned, the projected unit credit method is applied for accounting purposes. This leads to a straight-line allocation of the total expected amount of the benefit over the vesting period. CARs are recognized in the income statement after being granted to key employees. Equity notes and CARs that have been awarded but have not yet vested generate a cash yield of 5% of the basic value per year. Vested equity notes and CARs do not generate any yield. 4.30 Other non-current liabilities Other non-current liabilities include management fees received in advance which are stated at nominal value. The management fees are recognized in the income statement once the services have been performed. The current portion of the non-current liabilities is classified as Other nonfinancial liabilities.