Today, Wavin - Jaarverslag.com

Wavin Annual Report 2010 | page 87For the purpose of impairment testing, goodwill is allocated to the CGU or group of CGUs which represent the lowest levelwithin the Group at which the goodwill is monitored for internal management purposes.The Group’s corporate assets are allocated to the CGUs. If there is an indication that a corporate asset may be impaired,then the recoverable amount is determined for the CGU to which the corporate asset belongs.Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately and therefore isnot tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment asa single asset when there is objective evidence that the investment in an associate may be impaired.(iv) Reversals of impairmentAn impairment loss of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periodsare assessed at each reporting date for any indications that the impairment loss has decreased or no longer exists.An impairment loss in respect of a non-current asset is reversed if the subsequent increase in recoverable amount can berelated to an event occurring after the impairment loss was recognised. In respect of other assets, an impairment loss isreversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss isreversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have beendetermined, net of depreciation or amortisation, if no impairment loss had been recognised.(m) Assets classified as held-for-saleNon-current assets, or disposal groups comprising assets and/or liabilities, that are expected to be recovered primarilythrough sale rather than through continuing use are classifi ed as held-for-sale. Immediately before classifi cation as held-forsalethe assets are remeasured in accordance with the Group’s accounting policies. Thereafter the assets are measured atthe lower of their carrying amount or fair value less cost to sell and are no longer depreciated. Any impairment loss on adisposal group fi rst is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no lossis allocated to fi nancial assets, deferred tax assets and employee benefi t assets, which continue to be measured inaccordance with the Group’s accounting policies. Impairment losses on initial classifi cation as held-for-sale and subsequentgains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of anycumulative impairment loss.Intangible assets and property, plant & equipment once classifi ed as held-for-sale are not amortised or depreciated.In addition, equity accounting of equity-accounted investees ceases once classifi ed as held-for-sale.(n) Cash and cash equivalentsCash and cash equivalents comprise cash in hand, cash in bank accounts and call deposits with original maturities of threemonths or less. All amounts are readily available.(o) EquityRetained earnings / appropriation of profitThe net profi t for the year under review is added to the retained earnings taking into account the required movements in legalreserves. Dividends are discretionary at the option of the shareholders. Dividends are recognised as a liability in the period inwhich they are declared.The Group can only declare dividends in so far as the equity exceeds the amount of the paid-up capital increased by thereserves that must be legally maintained and taking into account the restrictions agreed under our Syndicated Loan Facility todistribute cash dividends.(p) Interest-bearing loans and borrowingsInterest-bearing loans and borrowings are recognised initially at fair value net of transaction costs incurred, with any differencebetween initial carrying amount and redemption value being recognised in the income statement over the period of theborrowings on an effective interest basis. Subsequent to initial recognition the interest-bearing loans and borrowings aremeasured at amortised cost using the effective interest method.Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan and are amortised using theeffective interest method during the period of the borrowings.