2009 - Jaarverslag

28 LONG-TERM DEBTSWhen included for the first time, interest-bearing loans received are stated at fair value less directly attributabletransaction costs. After firsttime recognition, interest-bearing loans are valued at amortised cost, with thedifference between the cost and the redemption price being stated in the statement of comprehensive incomeon the basis of the effective interest method over the term of the loans.29 TRADE CREDITORSTrade creditors and other payables are stated at amortised cost.30 DETERMINATION OF FAIR VALUEA number of principles and the group’s information provision require the determination of the fair value of bothfinancial and non-financial assets and liabilities. For the purposes of valuation and information provision, thefair value is determined on the basis of the following methods. If applicable, further information on the principlesfor determining the fair value is provided in the section of these notes applying specifically to the respectiveasset or the respective liability.Tangible fixed assetsThe fair value of tangible fixed assets included as a result of a business combination is based on market value.The market value of real estate is the estimated value at which an item of immovable property can be traded onthe valuation date between a well-informed purchaser and a well-informed seller in a transaction on anobjective, business basis, in which both parties have acted carefully and without coercion. The market value ofother tangible fixed assets and inventories is based on the listed market prices of comparable assets and items.Intangible fixed assetsThe fair value of patents and trademarks acquired as part of a business combination is determined on the basisof the discounted estimated royalties which have been avoided as a result of ownership of the patent ortrademark. The fair value of customer relationships acquired in a business combination is determined using theexcess earnings method over several periods, with the respective assets being valued after deduction of a realreturn on all other assets which jointly constitute the associated cash flows. The fair value of other intangibleassets is based on the expected discounted value of the cash flow from the use and ultimate sale of the asset.InventoriesThe fair value of inventories acquired as part of a business combination is determined on the basis of theestimated sale price in normal business operation, less the estimated costs of completion and the sale costs,plus a reasonable profit margin reflecting the completion and sale effort.Trade debtors and other receivablesThe fair value of trade debtors and other receivables, excluding projects in hand on behalf of third parties, isestimated at the discounted value of the future cash flows, which in turn are discounted at the market interestrate applying on the reporting date. This fair value is determined for information purposes.Royal Ten Cate Annual Report 2009 103