2011 Annual Report - Italcementi Group

2011 Annual Report
Presentation 4
General information 15
Annual Report Consolidated Annual Report Directors’ report 28
Extraordinary session Italcementi S.p.A. Annual Report Consolidated financial statements 63
Depreciation
Depreciation is generally calculated on a straight-line basis over the estimated useful life of each component of
an asset. Land is not depreciated, with the exception of land used for quarrying operations.
Asset useful life determines the depreciation rate until a subsequent review of residual useful life. The useful
life range adopted for the various categories of assets is disclosed in the notes.
Quarries
Costs for the preparation and excavation of land to be quarried are amortized as the economic benefits of such
costs are obtained.
Quarry land is depreciated at rates reflecting the quantities extracted in the period in relation to the estimated
total to be extracted over the period in which the quarry is to be worked.
The Group makes specific provision for quarry environmental restoration obligations. Since the financial
resources required to settle such obligations are directly related to the degree of use, the charge cannot be
defined at inception with a balancing entry to the asset cost, but is provided to reflect the degree of use of the
quarry.
1.7 Leases
Finance leases, which substantially transfer to the Group all risks and rewards incidental to ownership of the
leased asset, are recognized from the lease inception date at the lower of the leased asset fair value or the
present value of the lease payments. Lease payments are apportioned between finance costs and reductions
against the residual liability so as to obtain a constant rate of interest on the outstanding liability.
The policies used for depreciation and subsequent measurement of leased assets are consistent with those
used for the Group’s own property, plant and equipment.
Leases where all risks and rewards incidental to ownership are retained by the lessor are classified as
operating leases.
Operating lease payments are recognized as expense on a straight-line basis over the lease term.
1.8 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
cost, including costs directly attributable to the purchase. Subsequent to initial recognition, investment property
is measured at amortized cost, based on asset useful life less any impairment losses.
1.9 Goodwill
Goodwill recognized in accordance with IFRS 3 revised is allocated to the cash-generating units that are
expected to benefit from the synergies created by the acquisition. Goodwill is stated at the original value less
any impairment losses identified as a result of tests conducted on an annual basis or more frequently if
indications of impairment emerge.
When goodwill is allocated to a cash-generating unit part of whose assets are disposed of, the goodwill
associated with the sold assets is taken into account when determining the gain or loss arising from the
transaction.
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.
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