interim report Q1/2014
VVO Group forms a financial entity that reports on its operations in two segments. The basis for the segment division is the profit distribution limitation defined by the Act on State-Subsidised Housing Loans (ARAVA Act).
The VVO Non-subsidised segment includes privately financed rental housing, and such state-subsidised housing that has unlimited revenue recognition and is subject to property-specific limitations, based on the ARAVA Act, which will expire by 2025 at the latest. The plot reserve included in inventories and apartments for sale are also included in the VVO Non-subsidised segment.
The VVO State-subsidised segment includes rental housing that is subject to longer-term property-specific limitations based on the ARAVA Act and interest subsidy legislation. The Group companies VVO Asunnot Oy and VVO Korkotukikiinteistöt Oy, which are subject to the profit distribution limitation specified in the ARAVA Act, form part of the VVO State-subsidised segment. These companies can pay their owner an eight per cent return on own funds invested in them that have been confirmed by the Housing Finance and Development Centre of Finland (ARA). The return payable from the annual profits of companies within the VVO State-subsidised segment totals approximately EUR 3 million.