Note 1 - Beerenberg

Derivatives at fair value
through profit or loss
Derivatives are recognised at fair value on the trade date
and then at their subsequent fair value. Associated gains and
losses are included in the income statement under “Other
(losses) gains” in the period in which they occur.
Share capital
Ordinary shares are classed as equity. Costs directly attributable
to the issue of ordinary shares are recognised as
a deduction from equity (share premium reserve) net of any
tax effects.
Tangible non-current assets
The Group’s tangible non-current assets comprise production
equipment, workshops and improvements to buildings
and other operating equipment. Tangible non-current assets
are recognised in the statement of financial position at cost
less accumulated depreciation and write-downs. The cost
price of tangible non-current assets is the purchase price including
expenses directly attributable to the purchase of the
asset. The cost of self-constructed assets includes the cost
of materials, direct labour costs, borrowing costs and other
costs directly attributable to bringing the assets to a working
condition for their intended use, the cost of dismantling and
removing the items, and restoring the site on which they are
used.
Expenses incurred after the non-current asset has been put
into use, such as ongoing daily maintenance, are recognised
in profit or loss in the period in which they were incurred,
except for other expenses expected to generate future
economic benefits that are recognised as a part of the noncurrent
asset.
If substantial, individual components of an item of property,
plant and equipment have different useful lives, they are accounted
for as separate components.
Gains and losses on disposal are included in the operating
profit or loss.
Goodwill
The Group measures goodwill as the fair value of the consideration
transferred, less the net amount (normally fair
value) of the identifiable assets acquired and liabilities assumed,
all measured as at the acquisition date.
Goodwill is distributed to cash-generating units and is not
subject to an amortisation schedule but is tested for impairment
annually and when there is an indication that a writedown
is necessary. Goodwill write-downs are not reversed.
For the purpose of testing goodwill for impairment, goodwill
is allocated to the cash-generating units that are expected to
benefit from the acquisition.
Intangible assets
Research and development
Expenditure on research activities, undertaken with the
prospect of gaining new scientific or technical knowledge, is
recognised in profit or loss as incurred.
Development activities include designs or plans for the
production of new or substantially improved products and
processes. Development expenditure is capitalised only if it
can be reliably measured, if the product or process is technically
or commercially viable, if future economic benefits
are probable, and if the Group intends to and has sufficient
resources to complete the development and to sell or use the
asset. The expenditure capitalised includes materials, direct
labour, directly attributable overhead costs and borrowing
costs. Other development expenditure is recognised in profit
or loss as incurred.
Capitalised development expenditure is measured at cost
less accumulated amortisation and accumulated impairment
losses.
The Group’s intangible assets relate to identified excess
value such as technology and customer relationships arising
in connection with the acquisition of Bjørge Norcoat AS in
2007 and relating to in-house technology in the field of insulation
(Benarx) and cutting technology (Green Turtle). See
also Note 12 concerning intangible assets.
Depreciation
Property, plant and equipment are depreciated on a straightline
basis over their estimated useful life. Depreciation
is calculated on the basis of the cost of the asset or other
amount substituted for cost, less its residual value.
The economic useful life of our scaffolding was reassessed in
2010, and its period of use has now been set at 20 years. The
period of use is the period in which the company expects to
use the scaffolding and may thus be shorter than its economic
useful life. The period of use and the residual value
are assessed at the end of each reporting period and adjusted
if necessary. Scaffolding are depreciated over a period of 15
years.
Containers and workshops are depreciated over a period of
10 years, while other production equipment and other assets
are depreciated over a period of 3 –7 years.
Beerenberg CORP. AS Group group accounts 2012
37