Annual report 2012 - Comrod

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Annual report 2012 22/92Strategies and values | Group | Parent company | Corporate governance | ContactAnnual report Financial statement Notescost until its manufacture or developmenthas been completed. Work in progress is notdepreciated until the asset is taken into use.An item of property, plant and equipment isderecognized upon disposal or when no futureeconomic benefits are expected from its use ordisposal. Any gain or loss arising on derecognitionof the asset (calculated as the difference betweenthe net disposal proceeds and the carryingamount of the asset) is included in the incomestatement in the year the asset is derecognized.2.10 LeasingFinance leasesA lease is classified as a finance lease if ittransfers to the Group substantially all the risksand rewards incidental to ownership of a leasedasset. At the start of the lease term, finance leasesare recognized at the lower of the fair value andthe net present value of minimum lease payments.When calculating the net present value ofminimum lease payments, the implicit rent of thelease is used if it can be calculated, or otherwisethe Company’s incremental borrowing rate isused. Expenses directly related to establishing thelease are capitalised.The same depreciation period is used as for theCompany’s other depreciable assets. If it is notreasonably certain that the Company will takepossession at the end of the lease term, the assetis depreciated over the shorter of the lease termand the useful life of the asset.by the counterparty are classified as operatingleases. Rent payments are classified as operatingexpenses and are recognized in the incomestatement in a straight line over the course of the lease.2.11 Financial instrumentsFinancial assetsInitial recognitionFinancial assets within the scope of IAS 39 areclassified as financial assets at fair value throughprofit or loss, loans and receivables, held-tomaturityinvestments, available-for-sale financialassets, or as other financial assets. The Groupdetermines the classification of its financial assetsat initial recognition.Financial assets are recognised initially at fairvalue plus, in the case of investments not at fairvalue through profit or loss, directly attributabletransaction costs.Purchases or sales of financial assets that requiredelivery of assets within a time frame establishedby regulation or convention in the marketplace(regular way purchases) are recognised on thetrade date, i.e., the date that the Group commitsto purchase or sell the asset.The Group’s financial assets include cash andshort-term deposits, trade and other receivablesand derivative financial instruments. None of thederivatives are designated as hedging instrumentsin hedge relationships.Operating leasesLeases where most of the risk and returnassociated with ownership of the asset is heldSubsequent measurementThe subsequent measurement of financial assetsdepends on their classification.22
Annual report 2012 23/92Strategies and values | Group | Parent company | Corporate governance | ContactAnnual report Financial statement NotesFinancial assets at fair value through profit or lossThis category includes derivative financialinstruments entered into by the Group that arenot designated as hedging instruments in hedgerelationships as defined by IAS 39. Financialassets at fair value through profit and loss arecarried in the statement of financial position atfair value with changes in fair value recognized inprofit and loss.Loans and receivablesThis category includes trade and other receivablescarried at amortised cost or at nominal amountless provision for bad debt were this can beregarded as a reasonable proxy for fair value.Financial liabilitiesInitial recognitionFinancial liabilities within the scope of IAS 39are classified as financial liabilities at fair valuethrough profit or loss, or other liabilities. TheGroup determines the classification of its financialliabilities at initial recognition.Financial liabilities are recognised initially at fairvalue less, in the case of other liabilities, directlyattributable transaction costs.The Group’s financial liabilities include trade andother payables, bank overdraft, interest bearingdebt and derivative financial instruments.Subsequent measurementThe measurement of financial liabilities dependson their classification as follows:Financial liabilities at fair value through profit orlossThis category includes derivative financialinstruments entered into by the Group that donot meet the hedge accounting criteria as definedby IAS 39. Gains or losses on liabilities held fortrading are recognised in profit and loss.Other liabilitiesAfter initial recognition, interest bearing debt issubsequently measured at amortised cost usingthe effective interest rate method. Gains andlosses are recognised in the income statementwhen the liabilities are derecognised as well asthrough the amortisation process. The calculationtakes into account any premium or discount onacquisition and includes transaction costs andfees that are an integral part of the effectiveinterest rate.Offsetting of financial instrumentsFinancial assets and financial liabilities are offsetand the net amount reported in the consolidatedbalance sheet if, and only if, there is a currentlyenforceable legal right to offset the recognisedamounts and there is an intention to settle on anet basis, or to realise the assets and settle theliabilities simultaneously.Impairment of financial assetsThe Group assesses at each balance sheet datewhether there is any objective evidence that afinancial asset or a group of financial assets isimpaired. A financial asset or a group of financialassets is deemed to be impaired if, and only if,there is objective evidence of impairment as aresult of one or more events that has occurredafter the initial recognition of the asset (anincurred ‘loss event’) and that loss event has animpact on the estimated future cash flows of thefinancial asset or the group of financial assets that23
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Annual report 2012 - Comrod

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