01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

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01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

Consolidated Financial Statements

Tangible assets

Investments

Investment property

Property, plant and equipment held for own use are shown under tangible assets. These

assets are carried at amortized cost. We refer to the comments on “investment property”

for information on regular depreciation of buildings held for own use based on the

component approach. Other tangible assets are normally subjected to straight-line

depreciation over a useful life of 3 to 13 years. Tangible assets are also regularly tested

for impairment within the meaning of IAS 36. In the event of impairment, the carrying

amount of impaired tangible assets is reduced to the recoverable amount. In the event

that the reasons leading to an impairment loss in the past no longer apply, the carrying

amount of the asset is increased to a maximum of amortized cost.

Scheduled depreciation and write-downs are also recognized in the statement of income

as are write-ups. In the case of an insurance company, they are spread over investment

expenses, policyholder benefits and underwriting expenses. Where they relate to a noninsurance

company, depreciation and write-downs are reported in other expenses and

write-ups in other income.

Investment property is recognized in accordance with IAS 40 at cost less accumulated

depreciation and any accumulated impairment losses. The rate of scheduled depreciation

is determined by the component approach, whereby buildings are differentiated

by components and depreciated on a straight-line basis over a useful life of 10 to 80 years

depending on building class. In the case of permanent impairment, non-scheduled

depreciation is applied to the recoverable amount, which is the lower of fair value less

disposal costs or value in use. Scheduled and non-scheduled depreciation is shown in

the statement of income under investment result.

Subsequent acquisition or production costs are recognized as assets and depreciated

according to the rules described above if they are significant and qualify for recognition

under IAS 40. The fair values of properties are disclosed in the notes. Fair values are

determined by external evaluators based on the Valuation Ordinance (Wertermittlungsverordnung)

and the Valuation Guidelines (Wertermittlungsrichtlinien). In general, the

capitalized earnings value approach is employed.

120 Gothaer Group Annual Report 2009

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