ANNUAL REPORT 2008/09 - Sonova

Segment reporting
A business segment is a group of assets and op -
era tions engaged in providing products or services
that are subject to risks and returns that are different
from those of other business segments. The
Group is active in one business segment; the design,
development, manufacture, distribution and
service of hearing systems and related products.
A geographical segment is engaged in providing
products or services within a particular economic
environment that are subject to risks and returns
that are diff erent from those of segments operating
in other economic environments. The Sonova Group
has set the following geographical segments:
Europe, Americas, Asia/Pacifi c and Rest of world.
Impairment of non-fi nancial assets
The Group assesses at each reporting date whether
there is any indication that an asset may be impaired.
If any such indication exists, the recoverable
amount of the asset is estimated. The recoverable
amount of an asset or, where it is not possible to estimate
the recoverable amount of an individual
asset, a cash-generating unit is the higher of its fair
value less selling costs and its value in use. Value
in use is the present value of the future cash fl ows
expected to be derived from an asset or cash-
generating unit. If the recoverable amount is lower
than the carrying amount, an impairment loss is
recognized. Impairment of fi nancial assets is described
in Note 3.4 Financial assets. For the
purpose of impairment testing, goodwill as well as
corporate assets are allocated to cash generating
units. An annual impairment test is performed in
the fi rst half of each fi nancial year, even if there
is no indication of impairment (see section “business
combinations and goodwill”).
Related parties
A party is related to an entity if the party directly or
indirectly controls, is controlled by, or is under
common control with the entity, has an interest in
the entity that gives it signifi cant infl uence over
the entity, has joint control over the entity or is an
associate or a joint venture of the entity. In ad -
dition, members of the Board of Directors and the
Management Board or close members of their
families are also considered related parties as are
post-employment benefi t plans for the benefi t of
employees of the entity. No related party exercises
control over the Group.
Employee benefi ts (IAS 19)
Pension obligations
Most employees are covered by post-employment
plans sponsored by corresponding Group Companies
in the Sonova Group. Such plans are mainly defi
ned contribution plans (future benefi ts are determined
by reference to the amount of contributions
paid) and are generally administered by autonomous
pension funds or independent insurance companies.
These pension plans are fi nanced through employer
and employee contributions. The Group’s contributions
to defi ned contribution plans are charged to
the income statement in the year to which they
relate.
Sonova Group also has a number of defi ned benefi t
pension plans, both funded and unfunded. Ac -
counting and reporting of these plans are based on
annual actuarial valuations. Defi ned benefi t ob ligations
and service costs are assessed using the projected
unit credit method: the cost of providing
pensions is charged to the income statement so as
to spread the regular cost over the service lives
of employees participating in these plans. The pension
obligation is measured as the present value
of the estimated future outfl ows using interest rates
of government securities which have terms to ma -
turity approxi mating the terms of the related liability.
CONSOLIDATED FINANCIAL STATEMENTS
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