We are gonna forecast the dividends for Generali and to do this, we are gonna need to populate this table here, which reconciles shareholders' equity with the forecast for own funds, which we've already calculated. Therefore, this will allow us to work backwards from our forecast own funds to eventually a forecast equity figure. Helpfully, we have the historic numbers here that show us how the shareholders' equity for the last reported year reconciles to own funds. Now clearly, the first line of this reconciliation relies on shareholders' equity and we haven't yet calculated that. However, what we can do is link it in to what will be our calculations for equity. And that means that once we've calculated equity, this link will automatically update. Now, our calculations for equity are gonna be done in the calculation section of our model. So let's go up to that now. So all the way to the top of our model and you can see here, that's gonna be the ending balance in our equity, so we'll link it into this cell here. Now clearly, this is showing us a nil amount at the moment but once we've calculated our equity, that number will update. So now let's have a look at the rest of the reconciliation. Now the first item here is the intangibles and DAC assets and we're excluding those from equity. Note that in this situation, there aren't any material deferred tax assets to exclude but we would exclude them if there were any. So let's grab our forecast intangibles and our DAC asset from our balance sheet. So all the way up to the top of our balance sheet for our intangibles and then up to our DAC assets.

So there we are. Now the next adjustment is the market-to-market adjustments on investments and insurance provisions to bring the balance sheet amounts into line with current market values. So how can we forecast this? Well, in this situation, I'm just gonna roll forward the prior year adjustment but if there were major changes to market conditions or a large change in the investments and insurance provisions balances, we would probably need to flex this adjustment somewhat. Now the next adjustment is the subordinated liabilities adjustment. Well, again, how can we forecast this? Well, I'm gonna take the prior year adjustment and then flex this for any increase or decrease in financial liabilities in our forecast balance sheet. So I'm gonna go up to my balance sheet to my financial liabilities and I'll take the current year number and then deduct from that the prior year number.

So there we have our forecast adjustment for subordinated liabilities. Now the next adjustment is just other adjustments and I'm just gonna roll forward the prior year adjustment 'cause that's a relatively small amount, and it seems to be quite stable year on year. So that brings us to the final adjustment to equity and that's the proposed dividend which the dividend which the company anticipates paying in the next financial year. So how can we calculate this? Well, if we assume that any surplus own funds above and beyond the target own funds that we've already calculated can be distributed as a dividend in the following year, then we can treat this item as a residual item in our table. So we just need to take the target own funds and then deduct from this some of all of the items in the table above.

Now when we do this, clearly, we initially see it quite an unusual figure for the proposed dividend. In fact, it's showing as a positive item, but that's because we haven't yet calculated our shareholders' equity. Once we do this, our dividend figure will update and hopefully look more sensible. Now the last thing we're going to do is to roll forward all of our calculations to the end of our forecast period. And once we've done that, we now have a forecast dividend figure for each of our forecast years.