Annual report 2004 (English) - PDF 3546K - Imperial Tobacco

Depreciation
Rate (%)
Structures 2-4
Plant and machinery 10-25
Other fixtures, tools and furniture 6-25
Other tangible fixed assets 10-33
The Group records the appropriate allowances,
which are generally calculated based on appraisals
performed by independent third parties, to
recognize possible losses arising from the
differences between the net book value and the
market value of assets, basically property, that are
no longer in use or are in the process of being sold.
c) Long- and short-term investments
Holdings in the capital stock of non consolidated
companies and ownership interests in Group and
Associated companies not considered strategic and
not included in consolidation are valued at the
lower of cost or market.
The “Long-Term Investment Securities” account
includes the LOGISTA and SEITA shares assigned
to the stock option compensation plans defined for
management of each of these two Group companies
(see Notes 4-o and 7-b).
In the case of listed companies, market value was
deemed to be the lower of market price at year-end
or average market price in the last quarter of the
year.
In the case of unlisted companies, market value
was calculated based on the underlying book value
of the holding at year-end, adjusted by the amount
of the unrealized gains disclosed at the time of the
acquisition and still existing at the date of
subsequent valuation.
Allowances are recorded to recognize the
unrealized losses (cost higher than market value)
on the holdings.
Altadis Group 2004 Financial Information 93
Marketable securities whose redemption value and
yield are guaranteed by the issuer entities are
recorded at cost and the unmatured accrued
interest is capitalized.
Loans granted to associated companies and other
loans and credits are recorded at the amounts
delivered and not yet repaid. The Group has
recorded allowances to cover the risk of
noncollectibility, calculated based on the
probability of recovering each debt depending on
its age and the solvency of the debtor.
The guarantees and deposits, which have generally
been provided to guarantee compliance with
contractual obligations, are valued at the amounts
disbursed.
The Group generally places its cash surpluses in
deposits and other financial assets which are
recorded at the unmatured amounts actually
disbursed. Interest revenues on these transactions
are calculated by the interest method as they
accrue.
d) Financial derivatives
Transactions whose purpose and effect are to
eliminate or reduce exchange rate or interest rate
risks in asset and liability positions or in other
transactions are treated as hedging transactions.
The gains or losses arising over the lives of these
financial derivatives are credited or charged to
consolidated income using the same timing of
recognition method as that used for the main asset
and liability items and transactions whose risks
they hedge.
e) Parent Company shares
The shares of treasury stock of the Parent
Company the use of which has not yet been decided
upon are recorded under the “Parent Company
Shares” caption on the asset side of the