PDF (2.63 MB) - Geberit International AG

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Intangible assets and goodwill
The excess of the purchase price over the fair value of net assets acquired is recorded as goodwill.
Goodwill and intangibles such as patents, trademarks and software acquired from third
parties are stated at cost less accumulated amortization. The amortization of goodwill and intangible
assets is calculated using the straight-line method based upon the following useful lives:
goodwill (5–20 years), patents and technology (10 years), trademarks (5 years) and software
(4 years). Goodwill from acquisitions after 31 March 2004 is not amortized.
Valuation of property, plant and equipment, goodwill and intangible assets
When the carrying amount of property, plant and equipment, goodwill or intangible assets is
bigger than its estimated recoverable amount, it is written down to its recoverable amount.
The valuation is based on single assets or, if such valuation is not possible, on the level of
group of assets for which there are separately identifiable cashflows.
Deferred financing fees
Financing fees are deferred and amortized over the expected life of the related debt instrument,
on a straight-line basis, or if the debt instrument has scheduled principal repayments, using
the bond outstanding method. Amortizations of deferred financing fees are part of financial income
and expenses.
Associated companies and joint ventures
The Group’s share of profits and losses of associated companies (voting rights between
20 % and 50 %) and joint ventures is included in the consolidated income statements in
accordance with the equity method of accounting. All other non-consolidated investments
are stated at cost, with adequate provision for diminution in value of a permanent nature.
Provisions
The Group recognizes provisions when it has a present legal or constructive obligation to
transfer economic benefits as a result of past events and a reasonable estimate of the obligation
can be made. The Group warrants its products against defects and accrues for such
warranties at the time of sale based upon estimated claims. Actual warranty costs are
charged against the provision when incurred.
Sales and sales deductions
Sales include the invoiced net amounts after deduction of rebates and are recognized upon
shipment of products to customers. Credit notes issued subsequently are deducted.
Sales deductions are recognized when the sales are recorded.
Marketing expenses
All costs associated with advertising and promoting products are expensed in the financial
period during which they are incurred.
Geberit Group