Annual Report

Astarta Holding N.V.Astarta Holding N.V. Consolidated financial statements as at and for the year ended 31 December 2011(ii)(g)(h)(i)Available-for-sale financial assetsInvestments in equity securities and certain debt securities are classified as available for sale financialassets. Subsequent to initial recognition, they are measured at fair value and changes therein, other thanimpairment losses, and foreign exchange gains and losses on available-for-sale monetary items, arerecognized directly in other comprehensive income. When an investment is derecognized, the cumulativegain or loss in other comprehensive income is transferred to profit or loss.Investments in equity securities and promissory notes available-for-sale that are not quoted on a stockexchange and where fair value cannot be estimated on a reasonable basis by other means are stated atcost less impairment losses.In the case of debt instruments classified as available-for-sale, impairment is assessed based on the samecriteria as financial assets carried at amortised cost. However, the amount recorded for impairment is thecumulative loss measured as the difference between the amortised cost and the current fair value, less anyimpairment loss on that investment previously recognised in the income statement.Loans and receivablesLoans and receivables are measured at amortized cost using the effective interest method, less anyimpairment losses.Fair value measurement principlesThe fair value of financial instruments is based on their quoted market price at the reporting date withoutany deduction for transaction costs. If a quoted market price is not available, the fair value of the instrumentis estimated using pricing models or discounted cash flow techniques.Where discounted cash flow techniques are used, estimated future cash flows are based on management’sbest estimates using a discount rate representing a market rate at the reporting date for an instrument withsimilar terms and conditions. Where pricing models are used, inputs are based on market related measuresat the statement of financial position date.InventoriesInventories are stated at the lower of cost and net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business, less the estimated costs of completion and selling expenses.The cost of raw materials at the agricultural and sugar production facilities is determined using the weightedaverage method including costs incurred in bringing them to their existing location and condition, such astransportation.Work in progress and finished goods include the the cost of raw materials, labor and manufacturingoverheads allocated proportionately to the stage of completion of the inventory.Investments into future crops represent seeds, fertilizers and land cultivation to prepare for the subsequentgrowing season.Cash and cash equivalentsCash and cash equivalents comprise cash balances and deposits with an original maturity date of threemonths or less and are stated at fair value.ImpairmentFinancial assetsA financial asset is considered to be impaired if objective evidence indicates that one or more events havehad a negative effect on the estimated future cash flows of that asset.An impairment loss in respect of a financial asset measured at amortized cost is calculated as the differencebetween its carrying amount, and the present value of the estimated of the future cash flows discounted atthe original effective interest rate. An impairment loss in respect of an available-for-sale financial asset iscalculated by reference to its current fair value.83