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B Consolidated Annual Financial Statements/Notes V. Notes to the Consolidated Financial Statements of Salzgitter AG 230 231
In the case of financial instruments that are classified as “available-for-sale financial assets”, a material or
permanent decrease in the fair value is posted to income as an impairment. Impairments of equity instruments
that have already been recorded in the income statement are reversed with no effect on income,
while impairments of debt instruments are reversed with effect on income.
Financial instruments are written off when the rights to payments from the investment have lapsed or
been transferred and the Group has essentially transferred all of the risks and opportunities associated
with their ownership.
Inventories
Inventories are stated at acquisition or production cost or the lower net selling value. Inventories are
valued at average costs or individually attributed acquisition or production costs. The production costs
are determined on the basis of normal capacity utilization. Specifically, the production costs include
not only the directly attributable costs, but also the production-related material costs and production
overheads including production-related depreciation. Borrowing costs are not capitalized as part of
acquisition or production costs. Lower values as of the reporting date resulting from the decrease
in net selling values are stated. If the net selling value of previously written-down inventories
has increased, the resultant reversal of write-downs is recorded as a reduction in the cost of materials
or a change in inventories.
All discernible storage and inventory risks that impact the expected net selling value are taken into
account by applying properly calculated value adjustments.
Work in process and finished products, as well as raw materials internally generated, are valued at
Group production cost which, in addition to direct costs, includes the variable and fixed overhead
costs that are calculated systematically or attributed.
Rights to emit CO2 gases are reported in the balance sheet under inventories (consumables and supplies).
Initial ownership of emission rights that were acquired gratuitously are recorded at an acquisition
cost of € 0. Emission rights acquired against payment are recorded at acquisition cost. Increases
in the value of the capitalized emission rights are realized only in the event of a sale. Impairments of
the capitalized emission rights are recorded when the market price of the emission rights has fallen
below the acquisition cost.
Trade Receivables
Trade receivables are initially recognized at fair value and subsequently measured at amortized cost
using the effective yield method, less impairments. An impairment of trade receivables is reported
when there is objective evidence that the Group will not be able to collect all of the amounts due. The
amount of the impairment corresponds to the difference between the book value of the receivable
and the net present value of the estimated future cash flows from the receivable, discounted at the
effective interest rate. The impairment is disclosed in the income statement.
Consolidated Annual
Financial Statements