Annual Report

They are recognised in the balance sheet at their net realisable
value. A provision for impairment is recognised if
there are objective indications that the receivable amounts
due cannot be recovered completely. Reductions in value
are recognised in the income statement. These amounts
correspond approximately to the fair value.
Cash and cash equivalents include cash on hand, postal
and bank accounts, cheques and fixed-term deposits with
an original maturity of less than 3 months.
Borrowings include credit, lease and loan liabilities and are
recognised initially at fair value before transaction costs
incurred. Borrowings are subsequently stated at amortised
costs; any difference between the proceeds and the
redemption value is recognised in the income statement
over the period of the borrowing using the effective interest
method.
All borrowing costs (interest, etc.) are recognised as an
expense in the period in which they are incurred.
Loans or other long-term financial assets are non-derivative
financial assets with fixed or determinable payments
that are not quoted in an active market. They arise when
the Group provides money, goods or services directly to a
debtor with no intention of trading the receivables. Loans
are recognised at amortised cost which corresponds in
general to the nominal value. They are reviewed regularly
for impairment. Loans are included in current assets, except
for those with maturities greater than 12 months after
the balance sheet date. These are classified as non-current
assets.
2.7 Cash and cash equivalents
Cash and cash equivalents are stated at nominal value.
They include cash on hand, postal and bank accounts,
cheques and fixed-term deposits with an original maturity
of less than 3 months.
2.8 Trade receivables
Trade receivables are measured at amortised cost less
allowances. Indications for impairment are: substantial
financial problems of the customer, a declaration of bankruptcy,
or a material delay in payment.
2.9 Inventories
Inventories are stated at the lower of cost and net realisable
value. The cost of goods comprises direct material
and production costs and related production overheads. It
excludes borrowing costs. The valuation of the inventory is
based on standard costs that are verified annually. Slowmoving
and obsolete stock that have insufficient inventory
turn are systematically partially or fully revaluated.
Trade discounts from suppliers are deducted from purchasing
costs.
Notes to Group Financial Statements
HUBER+SUHNER Annual Report 2010 · Part 2
2.10 Property, plant and equipment
Property, plant and equipment are stated on the balance
sheet at the purchased or manufactured cost less accumulated
depreciation. Depreciation is charged using the
straight-line method over the estimated useful lives of the
related assets. Land is not depreciated.
Land Indefinite useful life
Buildings 20–50 years
Technical equipment and machinery 3–15 years
Plant, office furniture and fixtures 3–10 years
Gains and losses on disposals of property, plant and equipment
are included in other operating revenue and expenses
in the income statement. Purchases of minor value are immediately
expensed in the income statement.
2.11 Leasing
Assets that are purchased under finance leasing are recognised
at net present value of the future minimum leasing
rates. These correspond to the fair value at the beginning
of the lease. The present value of the future minimum
leasing rates is recognised as finance lease liability and
the leased assets are depreciated over their useful lives.
Payments made under operating lease are charged to the
income statement on a straight-line basis over the period
of the lease.
2.12 Investment property
Investment properties are held to earn rental income and
capital gains. They are valued at purchase cost less accumulated
depreciation and impairments. Investment properties
are depreciated using the straight-line method over
their estimated useful life (20 to 50 years).
In accordance with IAS 40, the fair value is shown in the
notes for comparison. It is calculated based on internal net
present value or DCF method.
2.13 Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the Groups’ share at fair value of the assets, the
amount of non-controlled shares at the acquired company
as well as the fair value of all prior hold shares at the date
of acquisition over the share of the Group at the net assets
valued at fair value. If the costs of an acquisition are lower
than the net assets valued at fair value of the acquired
company the difference is directly recognised in profit and
loss. The HUBER+SUHNER Group have no capitalised
goodwill.
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