2.8 MEUR - Gorenje - Gorenje Group

ANNUAL REPORT 2011
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of the property, plant and equipment, and is recognised net
within other income/other expenses in profit or loss.
(ii) Reclassification to investment property
When the use of a property changes from owner-occupied to investment property, the property is remeasured
to fair value and reclassified as investment property. Any gain arising on remeasurement is recognised in profit
or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining
gain recognised in other comprehensive income and presented in the fair value reserve in equity.
(iii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the component will
flow to the Group, and its cost can be measured reliably. All other costs, such as day-to-day servicing of property,
plant and equipment are recognised in profit or loss as incurred.
(iv) Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component
of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the
lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Land is not depreciated.
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for
use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives for the current and comparative years are as follows:
buildings 20 - 50 years
plant and equipment 5 - 20 years
computer equipment 2 - 5 years
transportation vehicles 3 - 14 years
office equipment 3 - 10 years
tools 3 - 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if
appropriate.
(e) Intangible assets
(i) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement
of goodwill at initial recognition, see note 2(e)(i).
The Management Board of the company Gorenje, d.d.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge
and understanding, is recognised in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially improved products
and processes. Development expenditure is capitalised only if development costs can be measured reliably,
the product or process is technically and commercially feasible, future economic benefits are probable, and the
Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure
capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable
to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure
is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated
impairment losses.
The Management Board of the company Gorenje, d.d. 127