ANNUAL REPORT 2008/09 - Sonova

Leasing
Assets that are held under leases which eff ectively
transfer to the Group the risks and rewards of
ownership (fi nance leases) are capitalized at the in -
ception of the lease at the fair value of the leased
property or, if lower, at the present value of the minimum
lease payments. Minimum lease payments
are the payments over the lease term that the Group
is or can be required to make, excluding contingent
rent, costs for services and taxes to be paid by
the Sonova Group and reimbursed from the lessor,
together with any amounts guaranteed by Sonova or
by a party related to the Group. Assets under fi nancial
leasing are depreciated over the shorter of their
estimated useful life or the lease term. The corresponding
fi nancial obligations are classifi ed as “shortterm
debts” or “non-current fi nancial liabilities”,
depending on whether they are payable within or
after 12 months.
Leases of assets under which all the risks and
rewards of ownership are eff ectively retained by
the lessor are classifi ed as operating leases,
and payments are recognized as an expense on a
straight-line basis over the lease term unless
another systematic basis is more representative
of the time pattern of the Group’s benefi t.
Intangible assets
Purchased intangible assets such as software, licences
and patents, are measured at cost less accumulated
amortization (applying the straight-line
method) and any impairment in value. Software is
amortized over a useful life of 3 – 5 years. Intangibles
relating to acquisitions of subsidiaries (excluding
goodwill) consist generally of client relationships,
customer lists and brand names and are
amortized over a period of 3 – 10 years. Other in -
tangible assets are generally amortized over a period
of 3 – 10 years. Development costs capitalized
for projects not yet completed are not amortized,
but test ed for impairment on an annual basis.
Except for goodwill, the Sonova Group has no intangible
assets with an indefi nite useful life.
Business combinations and goodwill
Business combinations are accounted for using the
purchase method of accounting. The cost of a
business combination is equal to the fair values, at
the date of exchange, of assets given, liabilities
incurred or assumed, and equity instruments issued
by the Sonova Group, in exchange for control over
the acquired company plus any costs directly attributable
to the business combination. Any diff erence
between the cost of the business combination and the
Group’s interest in the net fair value of the identifi
able assets, liabilities and contingent liabi lities so
recognized is treated as goodwill. Goodwill is not
amortized, but is assessed for impairment annually
in the fi rst half of the fi nancial year, or more frequently
if events or changes in circumstances indicate
that its value might be impaired.
Other non-current fi nancial assets
Other non-current fi nancial assets consist of investments
in third parties and long-term receivables
from associates and third parties. Investments in
third parties are classifi ed as fi nancial assets at
fair value through profi t or loss and long-term receivables
from associates and third parties are classifi
ed as loans and receivables (see Note 3.4).
Short-term debts
Short-term debts consist of short-term bank debts
and all other interest bearing debts with a maturity
of 12 months or less. Given the short-term nature
of these debts they are carried at nominal value.
Provisions
Provisions are recognized when the Group has a
present obligation (legal or constructive) as a result
of a past event, where it is probable that an outfl ow
CONSOLIDATED FINANCIAL STATEMENTS
69