2009 - Jaarverslag

19.3 Expenses after first-time inclusionExpenses incurred for the replacement of a component of a tangible fixed asset are capitalised provided thefuture economic benefits resulting from the asset accrue to the Group and the costs of such replacementexpenses can be reliably determined. All other expenses are charged to the statement of comprehensive incomewhen they are incurred.19.4 DepreciationDepreciation is calculated on the amount to be written down, i.e. the cost of an asset, or another amountreplacing the cost, less the residual value. Depreciation is charged to the statement of comprehensive incomeon the basis of the straight-line method over the estimated economic life of each component of a tangible fixedasset. Land is not depreciated. The estimated economic life is as follows:◾ buildings 33 years◾ fixtures and installations in buildings 10 years◾ plant and equipment 7 – 10 years◾ inventory 5 years◾ computers and office equipment 3 – 5 yearsThe depreciation method, economic life and residual value are assessed periodically.20 INVENTORIESInventories are stated at the lower of cost or net realisable value. The net realisable value is the estimated saleprice in ordinary operations, less the estimated costs of completion and the sale costs. The cost of inventories isbased on the FIFO (first in, first out) principle and includes the costs incurred for the acquisition of theinventories, their production or conversion and bringing them to the existing location and condition. In the caseof inventories of finished products and work in progress, the cost includes in addition to the direct costs anappropriate portion of the indirect costs based on the normal production capacity.21 TRADE AND OTHER RECEIVABLESTrade and other receivables with a term of less than one year are stated at amortised cost less impairments.22 CASH AND CASH EQUIVALENTSCash and cash equivalents comprise cash balances and immediately claimable credit balances. Overdrafts atbanks which are immediately claimable and form an integral part of the Group’s cash management are includedas part of the cash and cash equivalents for the purposes of the cash flow statement.Royal Ten Cate Annual Report 2009 99