THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

opment costs recognized are amortized over the period of
expected future sales revenues connected to the related project.
The carrying amount of the development costs is reviewed annually
for impairment if the asset is not yet in use or more frequently
if indications of impairment arise during the course of the year.
Inventories
Inventories are valued at the lower of cost and net realizable value.
The cost of inventories includes the cost of acquiring the inventories,
production or conversion costs, and other costs incurred to
bring the inventories to their existing location and condition.
Net realizable value is determined as the estimated selling cost
less the estimated costs of completion and any necessary selling
expenses.
Raw materials are valued using the weighted average purchase
cost.
Finished goods and work in process are valued with the cost of direct
materials, direct labor as well as other direct costs and a reasonable
proportion of manufacturing overheads, based on normal
capacity utilization, excluding borrowing costs.
Trade and Other Receivables
Trade receivables are recognized at their original invoice amounts
less an allowance for uncollectible receivables. An allowance is
made when there is substantial objective evidence that the Group
will not be able to collect the receivables. Receivables are derecognized
as soon as they become uncollectible.
Impairment
Financial assets
Financial assets are measured at each reporting date to determine
whether there is any objective evidence of impairment. An impairment
loss is recorded if objective evidence exists that one or
more events have had an impact on the future cash flows deriving
from the asset.
An impairment loss with respect to a financial asset measured at
amortized cost is determined as the difference between its carrying
amount and the present value of the estimated future cash
flows, discounted at the original effective interest rate. An impairment
loss with respect to a financial asset held as available-forsale
is determined by reference to its fair value.
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Individually significant financial assets are tested for impairment on
an individual basis. All other financial assets are collectively assessed
in groups that share similar default risk characteristics.
All impairment losses are recognized in the income statement. Any
cumulative losses with respect to an available-for-sale financial
asset previously recognized in equity are transferred to the income
statement.
Assets recognized at amortized cost
If objective evidence exists that loans and receivables accounted
for at amortized cost are impaired, then the amount of the loss is
determined as the difference between the carrying amount of the
asset and the present value of the estimated future cash flows deriving
from the asset, discounted at the original effective interest
rate. The carrying amount is either reduced directly or indirectly
using an allowance account. The amount of the loss is recognized
in profit or loss.
The Group first of all assesses whether objective evidence of impairment
exists for financial assets that are individually significant
and also assesses, for assets which are not individually significant,
whether such evidence exists that these are individually or collectively
impaired. If the Group determines that there is no objective
evidence of impairment of an asset, whether the asset is individually
significant or not, it includes the asset in a group of financial
assets with similar default risk characteristics and collectively assesses
them for impairment. Assets that are individually assessed
for impairment and for which a new impairment loss is recognized,
or for which an impairment loss continues to be recognized, are
not included in any collective assessment of impairment.
If the amount of the impairment loss decreases in a subsequent reporting
period and the decrease can be objectively related to an
event that occurred after the impairment loss was recognized, then
the previously recognized impairment loss is reversed. The subsequent
reversal of the impairment loss is recognized in profit or
loss to the extent that the carrying amount of the asset does not
exceed its amortized cost at the date of reversal.
Non-financial assets
At each reporting date, the Group assesses whether evidence exists
that an asset is impaired. The carrying amount of items of
property, plant and equipment is reviewed for impairment when
events or changes in circumstances indicate that the carrying
amount of the asset is not recoverable. If any such indications
exist, or if an impairment test for the asset is required, then the
Group estimates the recoverable amount for the asset. An asset’s
Notes