ANNUAL REPORT - HSE

nomic benefits expected on the basis of the originally
assessed standard of performance of the assets are
recognised as expenses when incurred.
The difference between the net sales value and the
carrying amount of a disposed of item of property,
plant and equipment is transferred to revaluation operating
revenue or expenses.
Property, plant and equipment items intended for sale
are recorded as current assets intended for sale.
An item of property, plant and equipment is depreciated
using the straight-line depreciation method over
its expected useful life. Depreciation is accounted for
individually since the first day of the following month
after an item of property, plant and equipment has
been available for use. The depreciation charge for
the current year is recorded as an operating expense
for the year. The residual value of property, plant and
equipment has not been determined.
On initial recognition, long-term investments are recorded
at their historical cost plus the costs directly
attributable to the investment.
In the books of account of group companies, long-term
investments are recognised based on their settlement
date (payment date).
After initial recognition, long-term investments are
carried at cost in companies’ books of account (which
also includes investments in subsidiaries and associates)
and are recorded as available-for-sale financial
assets. Because their fair value cannot be determined
(this is not the case with derivatives), they are not enhanced
and, consequently, do not affect profit or loss
or revaluation surplus.
In the consolidated financial statements, investments
in associates are valued using the equity method.
Any indications of impairment of long-term investments
are determined on an annual basis.
Property, plant and equipment items are revalued if
the carrying amount exceeds the recoverable amount.
The reasons underlying the revaluation of property,
plant and equipment are checked individually in group
companies.
In the bookkeeping records the cost and accumulated
depreciation of items of property, plant and equipment
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
depreciation.
Depending on the envisaged settlement or the reason
for holding an investment, the investments are carried
as long-term or current assets in the balance sheet.
Assets (disposal groups) held for
sale
Assets included in a disposal group include assets for
which it can be reasonably assumed that their carrying
amount will be realised through the sale of these assets
in the next year and not through their further use.
ANNUAL REPORT HSE | FINANCIAL REPORT OF THE HSE GROUP
Investment property
Investment property is part of companies’ fixed assets
which bring economic benefits through leasing and
increasing of property value. In the books of account,
it is carried at cost.
Long-term investments
Long-term investments are part of fixed assets, the
returns on which should increase finance income and
which are normally held by group companies for more
than a year.
Inventories
Inventories are part of current assets that will either
be used while making products and rendering services
or sold.
Materials are initially recognised at cost comprising
the purchase price, import duties and other taxes and
direct costs of purchase.
The inventories of most end products are valued by
production costs in the narrow sense.
The companies reduce the value of material and raw
material inventories using the FIFO or the weighted
average cost method.
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