TŽ Annual Report 2008 in pdf, 7.5 MB - Třinecké železárny

Objects from precious metals acquired prior to 31 December 2001 are depreciated based on actual weight loss.The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the net book value ofthe asset at the sale date and is recognised through the profit and loss account.ProvisioningProvisions against tangible fixed assets are recognised in circumstances where the carrying value is greater than value in use, which is equal to the presentvalue of estimated future cash flows expected to arise from the continuing use of fixed assets or anticipated income for the intended sale.ImpairmentAt each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have sufferedan impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairmentloss (if any).3.2.2. Non-Current Financial AssetsNon-current financial assets principally consist of equity investments, securities and equity investments available for sale and long-term term deposits.ValuationSecurities and equity investments are carried at cost upon acquisition. The cost of securities or equity investments includes direct costs of acquisition,such as fees and commissions paid to brokers, advisors and stock exchanges. Financial assets acquired prior to 1 January 2002 are stated at purchase cost.At the balance sheet date, the Group records:Equity investments at cost less provisions against equity investments.Available-for-sale securities are valued pursuant to the Accounting Act (Section 27) at fair value, determined by reference to the market value or a reasonableestimate. If the determination of fair value is not practicable, the securities are valued at cost.At the balance sheet date, changes in the fair value of available-for-sale securities are recorded through balance sheet accounts Other non-current securitiesand equity investments and Gains and losses from the revaluation of assets and liabilities. A deferred tax is determined in respect of the revaluationdifference where the value of available-for-sale securities increases, and is recorded through accounts Gains and losses from the revaluation of assetsand liabilities and Deferred tax liability.Upon sale or any other disposal, they are valued on the basis of the weighted average of the cost.Investments in enterprises in which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activitiesare treated as Equity investments in subsidiaries.Investments in enterprises in which the Group is in a position to exercise significant influence over their financial and operating policies so as to obtainbenefits from their activities are treated as Equity investments in associates.Provisioning against Equity InvestmentsInvestments are provisioned if there is a risk that the fair value of a non-current financial asset is lower than its carrying value.In charging provisions against equity securities that are not fair valued, the Group refers to its detailed knowledge of the relevant entity, the results ofits operations and reflects its interest in the entitys equity.3.2.3. InventoryValuationPurchased inventory is valued at acquisition costs. Acquisition costs include the purchase cost and indirect acquisition costs such as custom fees, freightcosts and storage fees during transportation, commissions and insurance charges.Inventory is issued out of stock at costs determined using the weighted arithmetic average method.Internally developed inventory is valued at full operating costs established based upon a costing formula reflecting annual planned costings. The pricesare determined on the basis of an annual financial plan.The revaluation of internally developed inventory is performed as of 1 January of the current year with reference to the calculations made based on theapproved financial plan.During the reporting period, the Company analysed the internally produced inventory by comparing the valuation of own costs according to planned(planned costing) and actual costs. If the difference in valuation according to actual costs is greater than the valuation according to the planned own costs,the difference from the revaluation of internally produced inventory is reflected in financial accounting records only on the accounts of the general ledger,namely in Changes in internally produced inventory with a corresponding entry to Internally produced inventory. In the contrary case (if the differencein valuation according to the planned own costs is greater than the valuation according to actual own costs), the inventory is not remeasured and the differenceis recognised as a provisioning charge against internally produced inventory.ProvisioningProvisions against the inventory of material are made in respect of inventory with low or no movement and a very low likelihood for processing followingan individual analysis.A N N U A L R E P O R T T Ř I N E C K É Ž E L E Z Á R N Y , a . s . 2 0 0 877