2011 Annual Report - Italcementi Group

2011 Annual Report
Presentation 4
General information 15
Annual Report Consolidated Annual Report Directors’ report 150
Extraordinary session Italcementi S.p.A. Annual Report Separate financial statements 239
1.9. Investment property
Investment property is land and/or buildings held to earn rental income and/or for capital appreciation, rather
than for use in the production or supply of goods and services. Investment property is initially recognized at
purchase cost, including costs directly attributable to the purchase. Subsequent to initial recognition,
investment property is measured at amortized cost.
1.10. Intangible assets
Intangible assets purchased separately are capitalized at cost, while those acquired through business
combinations are recognized at provisionally estimated fair value at the acquisition date and adjusted where
necessary within the following twelve months.
Subsequent to initial recognition, intangible assets are carried at cost amortized over the asset’s useful life.
The company has not identified intangible assets with an indefinite useful life.
1.11. Impairment
Property, plant and equipment and investment property, and amortizable intangible assets, are tested for
impairment if indications of impairment emerge.
Assets represented by equity investments in companies recorded at cost are tested for impairment if
indications of impairment emerge.
Impairment is the difference between the asset carrying amount and its recoverable amount. Recoverable
amount is the greater of fair value, less costs to sell, of an asset or cash-generating unit, and its value in use,
determined as the present value of future cash flows.
Fair value less costs to sell is determined through application of relevant valuation models adopting
appropriate income multipliers, quoted share prices on an active market for similar enterprises or other
available fair value indicators applicable to the assets being measured.
In determining value in use, assets are measured at the level of cash-generating units on a continuing
operations basis. Estimated future cash flows are discounted at a rate determined for each cash-generating
unit using the weighted average cost of capital method (WACC).
If an impairment loss on an asset other than goodwill subsequently reverses in full or in part, the asset carrying
amount is increased to reflect the new estimated recoverable amount, which may not exceed the amount that
would have been reflected in the absence of the impairment loss. Impairment losses and reversals of
impairment losses are taken to the income statement.
1.12. Financial assets
All financial assets are recognized initially at cost at the purchase date. Cost corresponds to fair value plus
additional costs attributable to the purchase.
Subsequent to initial recognition, assets held for trading are classified as current financial assets and carried at
fair value; any gains or losses are taken to the income statement.
Held-to-maturity investments are classified as current financial assets, if they mature within one year;
otherwise they are classified as non-current assets and subsequently carried at amortized cost. Amortized cost
is determined using the effective interest rate method, taking account of any acquisition discounts or
premiums, which are apportioned over the entire period until maturity, less any impairment losses.
Other financial assets are classified as available for sale and measured at fair value. Any gains or losses are
shown in a separate equity caption until the assets are sold, recovered or discontinued, or until they are found
to be impaired, in which case the cumulative gains or losses in equity are taken to the income statement.
Equity instruments that are not listed on an active market and whose fair value cannot be measured reliably
are carried at cost.
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