19. Inventories
Land, building rights and property developments are recorded at the lower of cost and net realisable value. The Group capitalises interest expenses on loans and borrowings that fund these assets to facilitate the development. Interest costs are capitalised once development commences and until practical completion, based on the total actual finance cost incurred on the borrowings during the period. When properties are acquired for future redevelopment, interest on borrowings is recognised in the income statement until redevelopment commences.
Raw materials and finished goods are stated at the lower of cost and net realisable value. Cost is determined using the ‘first-in, first-out (FIFO) method’. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
|
2025 |
2024 |
|
|
Land and building rights |
330,618 |
269,143 |
|
Property development |
189,716 |
179,905 |
|
520,334 |
449,048 |
|
|
Raw materials |
10,273 |
9,650 |
|
Work in progress and semi-manufactures |
677 |
4,783 |
|
Finished products |
1,610 |
1,108 |
|
532,894 |
464,589 |
Land and building rights are presented as current assets in the ordinary course of business, however by its nature, the realisation of the majority of these assets will be past one year. The main part of the carrying amount of property development is expected to be sold within one year. The increase in land and building rights reflects BAM’s efforts to benefit from the growing demand for affordable and sustainable housing through investment within division NL to strengthen the Group’s position in the Dutch residential market.
Impairments relating to land and building rights and property developments are as follows:
|
Note |
2025 |
2024 |
|
|
Impairment charges |
1,836 |
3,212 |
|
|
Reversal of impairment charges |
(11,050) |
(5,406) |
|
|
9 |
(9,214) |
(2,194) |
The reversal of impairments of €11 million reflects updated planning and building rights of certain land positions, resulting in a higher net realisable value and the reversal of previously recognised impairments.
Property development includes the following completed and unsold property:
|
2025 |
2024 |
|||
|
Completed and unsold property |
Number/m² |
Carrying amount |
Number/m² |
Carrying amount |
|
Houses |
5 |
2,895 |
8 |
4,148 |
|
Commercial property - rented |
17,480 |
2,847 |
2,073 |
1,918 |
|
Commercial property - unrented |
5,807 |
6,702 |
6,002 |
6,894 |
|
12,444 |
12,960 |
|||
Other inventories were not subject to impairments in 2025 or 2024.
