Edisun Power Europe Ltd. Corporate Governance Report 2010 ...

34 Consolidated Financial Statements
All amounts are in 000 CHF if not otherwise noted
subsidiaries is included in ‘intangible assets’. Goodwill on
acquisitions of associates is included in ‘investments in
associates’ and is tested for impairment as part of the
overall balance. Separately recognized goodwill is tested
annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill
are not reversed. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating
to the entity sold.
Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating
units that are expected to benefit from the business
combination in which the goodwill arose.
(b) Trademarks and Licences
Acquired trademarks and licences are shown at historical
cost. Trademarks and licences have a finite useful life
and are carried at cost less accumulated amortization.
Amortization is calculated using the straight-line method
to allocate the cost of trademarks and licences over
their estimated useful lives (15–20 years).
2.7 Impairment of Non-Financial Assets
Assets that have an indefinite useful life, for example goodwill,
are not subject to amortization and are tested annually
for impairment. Assets that are subject to amortization
are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognized for
the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
2.8 Financial Assets
The Group classifies its financial assets in the following
categories: at fair value through profit or loss, loans and
receivables, and available for sale. The classification depends
on the purpose for which the financial assets were
acquired. Management determines the classification of
its financial assets at initial recognition.
Loans and Receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not
quoted in an active market. They are included in current
assets, except for maturities greater than 12 months after
the balance-sheet date. These are classified as noncurrent
assets. The Group’s loans and receivables comprise
‘trade and other receivables’, loans and cash and
cash equivalents in the balance sheet.
The Group did not own any financial assets of other categories
in the reporting period.
The Group assesses at each balance-sheet date whether
there is objective evidence that a financial asset or a
group of financial assets is impaired.
Effective as of January 1, 2009, the Group adopted the
amendment to IFRS 7 for financial instruments that are
measured in the balance sheet at fair value. This requires
disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
• quoted prices (unadjusted) in active markets for identical
assets or liabilities (level 1);
• input other than quoted prices included within level 1
that are observable for the asset or liability, either directly
(that is, as price) or indirectly (that is, derived
from prices) (level 2);
• input for the asset or liability not based on observable
market data (that is, unobservable input) (level 3).