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financial statements 2011
and discontinued operations
, depreciation is no longer
recognized.
Sales gains and losses resulting from the retiring
and sale of tangible fixed assets are included in other
operating income or expenses. Sales gains are defined
as the difference between the sale price and the
remaining acquisition cost.
Intangible Assets
Goodwill
Goodwill derived from business mergers is recog-
nized as the amount at which the compensation paid
out, the share held by non-controlling interests in the
acquiree and any previously owned holding combined
exceed the fair value of acquired net assets.
Acquisitions that took place in the period January
1, 2007 – December 31, 2009 are recognized according
to the previous ifrs 3 standard (2004). Goodwill arising
from business mergers taking place before 2007 cor-
responds with the carrying amount in accordance with
practices used in earlier financial statements, and this
amount is used as the deemed cost under the ifrs.
Goodwill (and other intangible assets with unlim-
ited useful life) is not subject to depreciation, but is
tested annually for any impairment. For this purpose
goodwill is allocated to cash-generating units, or, in the
case of associates, is included in the acquisition cost of
the said associates. Goodwill is measured at cost less
impairment.
Research and Development Expenditure
Research expenses are recognized as income state-
ment expenses for the period in which they arise.
Development expenses from the planning of newer
or more highly developed products are capitalized as
intangible assets in the balance sheet once expenses of
the development phase can be calculated reliably, once
the product can be implemented technically and used
commercially and once it can be expected that the
product will generate future financial benefit. Capital-
ized development expenses include the material, work
and testing costs that are directly associated with
completing the asset for its intended purpose. Devel-
opment expenses that have already been recorded as
expenses are not capitalized later.
Assets are subject to depreciation as soon as
they are ready for use. After their initial recognition,
capitalized development expenses are measured at
acquisition cost less accumulated depreciation and
impairment. The useful life of capitalized development
expenditure is four years, during which time the capi-
talized costs are recognized as expenses depreciated
using the straight line method.
Other Intangible Assets
Intangible assets are recognized in the balance sheet
at original acquisition cost when the acquisition cost
can be calculated reliably and when it is likely that the
expected economic benefits of the asset will flow to
the Group.
Intangible assets with limited useful life are recog-
nized in the income statement as expenses depreci-
ated using the straightline method during their known
or estimated useful life. The depreciation periods of
intangible assets are as follows:
Customer agreements and associated customer rela-
tionships
2–8 years
Patents and licenses
4 years
IT software
4–5 years
Trademarks
10 years
The consolidated financial statements do not cover
trademarks which have unlimited useful lives.
Inventories
Materials, accessories and unfinished and finished goods
are recognized under inventories. Inventories are meas-
ured at the lower of cost or net realizable value. Acqui-
sition cost is calculated using the first in, first out (fifo)
method. All purchasing costs, including direct trans-
portation, handling and other costs, are included in the
acquisition cost of products that have been purchased
as finished products. The acquisition cost of finished
and unfinished products manufactured by the company
is made up of raw materials, direct costs resulting from
work carried out, other direct costs and a systematically
applied share of the variable and fixed general costs
of manufacturing at a normal level of activity. The net
realizable value is the estimated sales price obtainable
through normal business, less the estimated expenses
of completing the product and the estimated essential
expenses of selling the product.
Leases
Leases of tangible assets in which the Group assumes
substantially all the risks and rewards incidental to
ownership are classified as finance leases. They are rec-
ognized in the balance sheet at the start of the lease
term, at the fair value of the leased asset or at the
present value of minimum lease payments, whichever
is lower.
The assets acquired through finance leases are de-
preciated during the useful life of the assets or during
the lease term, whichever is shorter. Leasings due for
payment are distributed to financial expenditure and
liability reduction during the lease term, so that each