## REALIZED GAINS AND LOSSES ON SHARES AND REAL ESTATE 

Realized and unrealized gains and losses on shares and real estate, under Dutch accounting principles, are recognized in the revaluation account, taking into account the related (deferred) taxes. In the income statement the structural total return on investments in shares and real estate is recognized. The total return includes the realized direct income (rents and dividends) of the reporting period and an amount of indirect income. The total return is calculated by determining the average of the total return yield over the last 30 years and multiplying this average yield by the average value of these investments over the last 7 years, adjusted for investment purchases and sales. 

The indirect income from these investments is then calculated as the difference between the total return and the realized direct income. The indirect income is released from the revaluation account, if and as far as each of the individual balances for shares and real estate are positive. 

Under US GAAP realized gains and losses on sales of shares and real estate are recorded in earnings in the period in which the sales occurred. Gains and losses, both realized and unrealized, on shares classified as trading are included in net income. For non-trading shares, unrealized gains and losses are reported as a component of comprehensive income. Impairments in value of shares deemed to be other than temporary are reported as a component of realized gains and losses. Real estate impairment is recognized as a realized loss in the income statement. 

Realized and unrealized gains and losses by their nature can show large fluctuations. Included in realized gains and losses on shares and real estate for US GAAP purposes are EUR 273 million (2002: EUR 1,057 and 2001: EUR 36 million) impairment losses due to an other than temporary decline in market value, and the reversal of the indirect return of EUR 631 million (2002: EUR 758 million and 2001: EUR 723 million). 

