The Group KD Group and KD Group dd

The Group KD Group Annual Report 2009
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2009
Group companies
The financial statements of all Group entities (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency of the Group are translated into the presentation currency as
follows:
- assets and liabilities for each balance sheet presented are translated at the reference rate of ECB or Bank of
Slovenia exchange rates on the date of the balance sheet;
- income and expenses for each income statement are translated at the average annual reference rate of ECB or
Bank of Slovenia exchange rates;
- all resulting exchange differences are recognised as a separate component of equity (reserves).
Upon consolidation, exchange differences arising from the translation of the net investment in foreign entities are transferred
to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the income
statement as part of the gain or loss on sale.
2.5 Property, plant and equipment
Property, plant and equipment are land, buildings and equipment used by the Group for the performance of its activities.
After initial recognition, property and equipment are carried at historical cost less accumulated depreciation and accumulated
impairment losses, if any (cost model). Historical cost includes expenditure that is directly attributable to the acquisition of the
items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in
which they are incurred. If the cost of an item of property, plant and equipment is significant, it is allocated to its individual
parts. If the parts are significant in relation to the total cost, and have different useful lives, each individual part of the asset is
accounted for separately.
An item of property and equipment is derecognised upon disposal or when no further economic benefits are expected from
the asset. The gain or loss arising from derecognition of an item of property or equipment is determined as the difference
between the disposal proceeds and the carrying amount of the item, and is recognised in other operating income or
expenses.
Depreciation
The Group systematically allocates to profit or loss the cost less residual value (depreciable amount) over the useful life of
each individual item of property, plant and equipment. The Group uses the straight-line depreciation method. Land is not
depreciated.
Depreciation is calculated individually.
The useful lives are as follows:
Property, plant and equipment
Buildings
Vehicles and machinery
Furniture, fittings and equipment
20 to 59 years
3 to 10 years
2 to 7 years
The assets’ residual values and useful lives are reviewed at least once a year on the balance sheet date and restated if
appropriate. If the asset’s recoverable amount is lower than its book value the asset is written down immediately to its
recoverable amount and the impairment loss is recognised in the income statement. The recoverable amount is the higher of
an asset's value in use and fair value less costs to sell (see Note 2.1.10).
91