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financial statements 2011
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liability remaining during the period receives the same
percentage of interest at the end of each month. Lease
liabilities are recorded under financial liabilities.
The Group does not have any leases classifiable as
finance leases where a Group company is the lessor,
nor does it have any purchase contacts, according to
the ifric 4 Determining Whether an Arrangement
Contains a Lease interpretation, which, on the basis of
their actual content, could be interpreted as a lease.
Leases in which substantially all the risks and
rewards incidental to ownership remain with the
lessor are classified as operating leases. Operating
lease expenses are recognized under other operating
expenses and the total value of future minimum lease
payments are disclosed in the Notes as off-balance
sheet liabilities.
Impairment of Tangible and
Intangible Assets
At each reporting date the Group assesses whether
there is any indication that an asset may be impaired. If
any such indication exists, the recoverable amount of
the asset is estimated.
Recoverable amounts are also evaluated annually
for the following asset items, irrespective of whether
or not there is any indication of impairment: goodwill,
intangible assets if they have unlimited useful life, and
unfinished intangible assets.
The recoverable amount is the fair value of the as-
set less expenses arising from sale or the value in use,
whichever is higher. The value in use is the future net
cash flows expected to be derived from an asset or
cash-generating unit, discounted to their present value.
The discount rate is a pre-tax rate that reflects current
market assessments of the time value of money and
the risks specific to the asset.
The impairment requirement is considered at the
cash-generating unit (CGU) level, or the level formed
by groups of cash-generating units, which are mainly in-
dependent of other units and whose cash flows can be
extracted from other cash flows. Six cash-generating
units have been defined in the Group:
1. Marketing Services Finland
2. Marketing Services Sweden
3 .Editorial Communication
4. Print & Distribution Finland
5. Print & Distribution Sweden
6. Publishing
An impairment loss is recognized when the carrying
amount of an asset is greater than its recoverable
amount. An impairment loss is recorded immediately
as either profit or loss. If an impairment loss affects
a cash-generating unit, it is first allocated by lowering
the goodwill allocated to the cash-generating unit and
then by lowering the unit’s other assets in the same
ratio. The useful life of an asset subject to depreciation
is reassessed when the impairment loss is recognized.
An impairment loss recognized for any assets other
than goodwill is reversed if there is a change in the
assessments used to calculate the asset’s recoverable
amount.
However, an impairment loss can only be reversed
up to the carrying value of the asset before recognition
of the impairment loss. An impairment loss recorded
for goodwill cannot be reversed under any circum-
stances.
Employee Benefits
Employee benefits include short-term employee ben-
efits, other long-term benefits, termination benefits
and postemployment benefits.
Short-term employee benefits include salary and
nonmonetary benefits, annual leave and bonuses.
Other long-term benefits include, for example, a cel-
ebration, holiday or remuneration in return for many
years of service. Benefits provided when employment
is terminated are based on termination of employ-
ment, not the employee’s performance.
Post-employment benefits comprise pensions
and other benefits, such as life insurance, provided on
the basis of employment. Benefits are classified into
defined contribution plans and defined benefit plans.
The Group has both defined contribution plans and
defined benefit plans.
Contributions to defined contribution plans are
recognized in the income statement for the period in
which the contributions are payable. Those plans that
do not fulfill the definition of defined contribution
plans are classified as defined benefit plans.
The company’s obligation to defined benefit plans
continues even after the contributions made during
the financial year. Annual actuarial calculations are
made for plans classified as defined benefit plans, and
the expense, and the liability or asset, is recognized in
the financial statements on the basis of these calcula-
tions. Actuarial assumptions are used to calculate the
defined benefit plan obligation. They are classified into
demographic statistical assumptions and economic
assumptions. Demographic statistical assumptions in-
clude mortality rates, the termination of employment
relationships and the commencement of work incapac-
ity. Economic assumptions comprise the discount rate,
future salary levels, expected return on plan assets and
the inflation assumption.