AnnuAl report 2010 - Walter Meier

40 / Consolidated FinanCial statements
Walter Meier / annual report 2010
Property, plant and equipment
– property, plant and equipment are measured at the cost of purchase or conversion less accumulated
scheduled depreciation and/or accumulated impairment losses. Scheduled straight-line depreciation is
based on the following useful lives for the assets:
– Buildings: 20–40 years
– leasehold improvements: 10 years, or lease duration if shorter
– office equipment: 5–10 years
– it hardware: 3–5 years
– production machines: 5–10 years
– tools: 2–5 years
– Vehicles: 4–8 years
land is not depreciated because of its unlimited useful life. expenses for maintenance and repairs are not
capitalized.
property, plant and equipment are either deleted from the accounts on disposal or when economic benefit
is no longer expected from the additional use or sale of the asset. the gains or losses resulting from the
deletion of the asset from the accounts are determined as the difference between the net sales proceeds
and the carrying amount of the asset and recorded in the income statement in the period in which the
asset is deleted from the accounts.
the residual values, useful lives and methods used for depreciating the assets are reviewed at the end of
each financial year and, if necessary, adjusted prospectively.
leases
Finance leases for which all the opportunities and risks associated with ownership of the leased asset are,
in essence, transferred to the Group lead to the leased asset being capitalized when the lease starts. the
leased asset is recognized at fair value or at the present value of the minimum lease payments if this
amount is lower. lease payments are divided into financing costs and the repayment portion of the
residual debt in such a way that a constant interest rate on the remaining lease liability is produced over
the term of the lease. Financing costs are recognized in the income statement.
leased assets are depreciated over an asset’s useful life. However, if it is not sufficiently certain that
ownership will be transferred to the Group at the end of the lease, the leased asset will be depreciated in
full over the shorter of the two periods, namely the anticipated useful life or the term of the lease.
lease payments for operating leases are recognized as an expense on a straight-line basis in the income
statement over the term of the lease.
intangible assets
intangible assets that are not acquired as part of a business combination are stated at the cost of purchase
or conversion when recorded for the first time. the cost of purchase of intangible assets acquired as
part of a business combination equates to their fair value at the date of acquisition. in subsequent periods,
intangible assets are stated at cost of purchase or conversion less accumulated depreciation and accumulated
impairment expense. the costs of internally generated intangible assets are, with the exception of
capitalizable development costs, not capitalized and are recognized in the income statement in the period
in which they are incurred.
a distinction is made between intangible assets with a limited useful life and those where the useful life is
indeterminate. at present, Walter Meier holds no intangible assets with an indeterminate useful life.
intangible assets with a limited useful life are amortized over their economic useful life and checked for
any possible impairment if there are indications that the intangible asset could be impaired. the period of
amortization and the method used for amortizing intangible assets with a limited useful life are checked
at the end of each financial year at least. the changes in the method of amortization or its duration that
are required because of changes in the anticipated useful life or the anticipated consumption of the
asset’s future economic benefit are treated as changes in estimates. amortization on intangible assets
with a limited useful life are, with the exception of software, recognized in the income statement under
the «Distribution» category of expense. amortization on software is recognized in the category of expense
that matches the function of this intangible asset in the company.