ANNUAL REPORT - HSE

Intangible assets and long-term
accrued revenue and deferred
costs
Intangible assets represent a part of fixed assets enabling
the performance of the companies’ registered
activities, while physically they do not exist.
Intangible assets are initially recognised at cost, which
is also comprised of duties and all costs incurred
while preparing an asset for its intended use. Interest
on loans for the acquisition of intangible assets is not
considered as part of the cost.
After initial recognition, intangible assets are measured
using the cost model.
An item of intangible assets with finite useful life is
amortised using the straight-line amortisation method.
Amortisation begins when the intangible asset is
available for use. The residual value of intangible assets
has not been determined.
In the bookkeeping records the cost and accumulated
amortisation of intangible assets are recorded separately,
whereas in the consolidated balance sheet they
are recorded at carrying amount, i.e. as a difference
between the cost and accumulated amortisation.
An item of property, plant and equipment is initially recognised
at cost. The cost comprises its purchase price,
import duties and non-refundable purchase taxes, and
any directly attributable costs of bringing the asset to
working condition for its intended use, especially the
costs of transportation and installation. The cost does
not include the costs incurred upon the dismantling or
refurbishment of property, plant and equipment.
At one of the subsidiaries the cost is also increased
by the amount of interest on loans taken out to acquire
an item of property, plant and equipment until
the item is ready for use.
The cost of an item of property, plant and equipment
constructed or manufactured within the Group consists
of the costs incurred as a result of its construction or
manufacturing and of indirect construction or manufacturing
costs that can be attributed to the item.
The cost of items of property, plant and equipment of
greater value is divided into individual items with different
useful lives.
The spare parts of higher value are recorded as property,
plant and equipment and depreciated over the
useful life of the related asset.
On disposal, intangible assets are eliminated from the
books of account, and the difference between the net
sales value and the carrying amount of a disposed of
intangible asset is transferred to revaluation revenue
or expenses.
Goodwill occurs in consolidation as a result of the
cost of an acquired interest in a company that is higher
than the value of this interest in the equity of such
a company. Goodwill is not amortised. It is impaired if
necessary.
Long-term accrued revenue and deferred cost items
relate to long-term deferred costs that are initially
recognised at cost but are later written down as part
of costs to which they belong.
Property, plant and equipment
Property, plant and equipment are part of long-term
assets owned by group companies and used for the
performance of their registered activities.
The anticipated costs of regular inspections and repairs
of property, plant and equipment are considered
as parts of property, plant and equipment.
After initial recognition, the items of property, plant
and equipment are measured using the cost model.
Grants and state aid provided for the acquisition of
property, plant and equipment are not deducted from
their cost but are instead carried as long-term accrued
costs and deferred revenue and used in accordance
with the accounted for depreciation.
Subsequent expenditure on an item of property, plant
and equipment increases its cost when it increases its
future economic benefits in excess of the originally assessed
future economic benefits. The subsequent expenditure
enabling the extension of the useful life of the
asset initially reduces the accumulated depreciation.
Repairs or maintenance of property, plant and equipment
carried out to restore or maintain future eco-
ANNUAL REPORT HSE | FINANCIAL REPORT OF THE HSE GROUP
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