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NAV changes are becoming mandatory for FY 2020

As we are now approaching to year-end reporting season, we thought it would be useful to point out once more to our members that the Net Asset Value (NAV) changes will need to be officially adopted for the first time in the annual reports ending on December 31, 2020, for those companies with December as fiscal year-end. As a reminder, the October 2019 EPRA BPR Guidelines are applicable for (annual) accounting periods starting on or after January 1, 2020, while the official first time of implementation would depend on a company’s fiscal year-end (for more details, see annexe 2 here).
Since the original set of EPRA NAV metrics – NAV and Triple Net Asset Value (NNNAV) – were introduced 15 years ago, there has been a profound evolution of property companies’ business models. The listed sector companies used to be long-term passive owners that have slowly turned into highly active assets managers and capital allocators. As the previous two NAVs responded quite well to the previous corporate strategy, the update into the three NAV metrics and the enhancement of the CapEx disclosure recommendation were crucial to better understanding the dynamics of these companies’ underlying operations.
These new metrics are enablers for investors and analysts to better understand the differences between the companies and sector thanks to greater transparency, comparability and relevance of financial reporting in the industry across Europe. Investors will be able to determine and differentiate between the value of the operational business and its tangible assets, as well as its break-up value.
As a result, EPRA, through its Reporting and Accounting Committee, has replaced the EPRA NAV and NNNAV measures with three new specific NAV measures. A lot of attention will be given to which of these three metrics a company thinks is most applicable to its corporate strategy; nevertheless, it is mandatory for companies to report all three metrics, as outlined in the guidelines.

  • Net Reinstatement Value (NRV) – aims to represent the value required to rebuild the entity and assumes that no selling of assets takes place.

  • Net Tangible Assets (NTA) – is focused on reflecting a company’s tangible assets (i.e. excluding goodwill etc.) and assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax liability.

  • Net Disposal Value (NDV) – assumes an orderly sale of the business netting off the deferred tax, financial instruments and any other liabilities.


The EPRA Reporting and Accounting team has conducted during 2020 a series of workshops and webinars in collaboration with the ‘Big 4’ as well as local real estate associations to update the market on the changes to the Best Practice Recommendation Guidelines. A pre-recorded presentation is available on the EPRA YouTube channel.
New BPR Awards methodology
 In addition to the new NAV metrics, EPRA has recently brought some updates to the BPR survey scoring methodology to reinforce BPR reporting quality assessment, emphasising greater transparency, and focus on stricter compliance. These updates will be applied for the years of 2021 and beyond with the primary goal being to further increase confidence in the reported figures.
EPRA’s BPR framework provides visibility and comparability to investors and analysts, and these changes will provide greater confidence in the metrics. A revised FAQ document, available on the EPRA website, sets out the main ground rules for the methodology to be used for deciding the EPRA BPR Award winners for the years of 2021 and beyond.
The updated methodology will be applied for the first time during the 2021 BPR Awards, where the annual reports with a fiscal year-end between April 30, 2020, and March 31, 2021, inclusive will be reviewed. The list of participating companies will be determined based on EPRA’s membership as of March 31, 2021.
The 2021 BPR Awards will primarily measure how the industry has complied with the disclosure requirements of the October 2019 EPRA BPR Guidelines, which introduced the three new EPRA Net Asset Value metrics (NRV, NTA, NDV) in replacement of EPRA NAV and NNNAV as well as an enhanced CapEx disclosure.[1]
In case you would require any further assistance in relation to the adoption of the new NAV disclosure, do not hesitate to contact randa@epra.com.
[1] The October 2019 BPR Guidelines are applicable for annual accounting periods starting on or after January 1, 2020.