2009 - Jaarverslag

17 PRINCIPLES FOR THE PREPARATION OF THE CASH FLOW STATEMENTCash flows from operating activities are presented on the basis of the indirect method. Cash flows in foreigncurrencies are converted at the exchange rate on the date of the cash flow or on a cash basis. Changes whichhave not resulted in cash flows, such as exchange rate differences, acquisitions, financial lease liabilities,changes in fair value, recognised share-related transactions and similar transactions are eliminated in thisstatement. Dividends paid to shareholders are included in the cash flow from financing activities. Dividendsreceived are stated in the cash flow from investing activities, and interest paid is stated in the cash flow fromoperating activities. Overdrafts which are immediately repayable and form part of the Group’s cash managementare included in the balance of cash and bank current accounts as part of the consolidated cash flow statement.18 INTANGIBLE FIXED ASSETS18.1 GoodwillAll acquisitions are accounted for using the purchase accounting method. Goodwill results from the acquisitionof operating companies, associated companies and joint ventures and is the difference between the cost of theacquisition and the net fair value of the acquired identifiable assets, liabilities and contingent liabilities.Up until 2000, goodwill was charged to equity. In the years 2001 to 2003 it was stated at cost less amortisation.Since 1 January 2004, goodwill has no longer been amortised but has been valued at cost less accumulatedimpairments. The book value of the goodwill on investments stated in accordance with the equity method isincluded in the book value of the respective investment. An impairment loss on such an investment is notallocated to any asset, including goodwill, that is part of the book value of the investment stated in accordancewith the equity method.Goodwill is allocated to cash generating units.18.2 Other intangible fixed assetsThe other intangible fixed assets consist of:Research and developmentCosts of research activities carried out with a view to acquiring new scientific or technical knowledge andinsights are stated as an expense in the statement of comprehensive income when they are incurred.Costs of development activities, in which research results are used for a plan or design for the production ofnew or substantially improved products and processes, are capitalised if the product or process is technicallyand commercially feasible and the Group has sufficient resources to complete the development and use or sellthe asset. The capitalised costs include material costs, direct labour costs, financing costs and an appropriateportion of directly attributable overheads. Other development costs are stated as an expense in the statementof comprehensive income when they are incurred. The capitalised development costs are valued at cost lessaccumulated amortisation and impairments (see note 23).Royal Ten Cate Annual Report 2009 97