2.8 MEUR - Gorenje - Gorenje Group

ANNUAL REPORT 2011
in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of
changes in the fair value of the derivative is recognised immediately in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying
amount of the asset when the asset is recognised. In other cases the amount accumulated in equity is reclassified
to profit or loss in the same period that the hedged item affects profit or loss. If the hedging instrument no
longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation
is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected
to occur, then the balance in other comprehensive income is recognised immediately in profit or loss.
Other derivative financial instruments
When a non-trading derivative financial instrument is not designated in a hedge relationship that qualifies for
hedge accounting, all changes in its fair value are recognised immediately in profit or loss.
c) Subsidiaries
Investments in subsidiaries are valued at cost. Incremental costs directly attributable to the acquisition of a
subsidiary are recognised as an increase in the cost of equity investment. Share of profit is recognized as income
when a resolution on payment is adopted by the Shareholders’ Meeting.
d) Associates
Investments in associates are valued at cost. Incremental costs directly attributable to the acquisition of an associate
company are recognised as an increase in the cost of equity investment.
e) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the
assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring
the site on which they are located, and capitalised borrowings costs. Purchased software that is integral
to the functionality of the related equipment is capitalised as part of that equipment.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying item of
property, plant and equipment were capitalised subject to the following conditions: if the value of individual
asset under construction in total sales exceeded 5%, and if the duration of assets under construction exceeded
6 months.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Fair value model or revaluation model is applied to land. The effect of revaluation is recorded in other comprehensive
income. Impairment of land previously increased in value results in a decrease in revaluation surplus in
The Management Board of the company Gorenje, d.d.
other comprehensive income; otherwise, it is recognised in the income statement.
Any gain or loss on disposal of an item of property, plant and equipment is calculated as the difference between
the net proceeds from disposal and the carrying amount of the item of property, plant and equipment,
and is recognised 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 Company, and if its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. All others costs, such as day-to-day servicing of property, plant and equipment, are recognised
in profit or loss as incurred.
The Management Board of the company Gorenje, d.d. 182