Annual Report 2007 - Muehlhan AG

ManaGeMent divisions share Group ManaGeMent report group Consolidated FinanCial stateMents
proportion of production, material and production-related administrative overheads. Contract costs are taken to expense
in the period in which they are incurred. if it is likely that total contract costs will exceed the total contract revenues attributable
to the respective contract, the anticipated losses are taken to expense immediately.
Receivables and other assets
pursuant to iaS 39.45, receivables and other assets are classified as loans and receivables.
receivables and other assets are initially stated at their attributable values and subsequently carried forward at their
amortized costs less write-downs. Write-downs adequately take into account all discernible risks estimated on the basis
of empirical values.
Profit realization
income is realized in the amount of the fair value attributable to the consideration received or receivable and constitutes
amounts for services rendered within the scope of normal operations less rebates, value-added tax and other taxes
incurred in connection with sales.
income from long-term make-to-order production is recognized in accordance with Group-internal accounting and
valuation procedures to be applied with respect to long-term construction contracts (see above).
Property, plant and equipment
property, plant and equipment are stated at purchase cost less accumulated depreciation. depreciation is accounted
for over the expected useful lives. in general, depreciation is calculated on a straight-line basis. the useful lives are related
to the types of assets:
buildings 5–50 years
technical equipment, operating and office equipment 2–15 years
repair and maintenance costs are expensed when incurred. Material renewals and improvements are capitalized if the
criteria for the recognition of an asset are applicable. in principle, leased assets classified as finance leases on the basis
of the respective lease agreements are accounted for as tangible fixed assets at the attributable fair value or the lower
present value of minimum lease payments and reduced by accumulated depreciation subsequently.
if there is an indication of an impairment of tangible fixed assets, the required write-downs are estimated. in this
connection, the realizable amount (defined as the higher of net realizable value and the service value) is compared with the
carrying amount of the asset. if the realizable amount is lower than the carrying amount, the balance is taken to expense.
if the reason for the write-down has ceased to exist in the meantime, a write-up is recorded up to amortized costs.
Goodwill and intangible fixed assets with an indeterminate useful life
Goodwill is accounted for at cost of acquisition. pursuant to ifrS 3, no scheduled amortization has been recorded since
1 January 2005. an impairment test is made at least once in the financial year and may result in a write-down. there are
no other intangible fixed assets with an indeterminate useful life.
Other intangible assets
purchased intangible assets include mainly concessions, industrial and similar rights. they are stated at purchase
costs less accumulated amortization. the useful lives are estimated at three to 17 years, amortization is calculated on a
straight-line basis.
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