Uster Technologies Ltd | Annual Report 2009 Uster Technologies ...

3.7 InventoriesInventories are measured at the lower of cost and net realizable value. Cost for inventories is based on theweighted average principle and includes expenditure incurred in acquiring the inventories, conversion costsand other costs incurred in bringing them to their existing location and condition. Manufactured inventoriesas well as work in progress cost includes an appropriate share of production overheads based on normaloperating capacity.Net realizable value is the estimated selling price in the ordinary course of business less the estimated costsof completion and the selling expenses.3.8 Cash and Cash EquivalentsCash and cash equivalents include cash on hand, bank account balances as well as short-term deposits withan original maturity of 90 days or less.For the purpose of the Consolidated Statements of Cash Flows bank overdrafts that are repayable on demandand form an integral part of the Group’s cash management are included as a component of cash and cashequivalents. As of December 31, 2009 and 2008, the Group did not have any such overdrafts drawn.3.9 ProvisionsProvisions are recognized when the following criteria are met:• The Group has a present legal or constructive obligation as a result of a past event;• It is probable that an outflow of resources embodying economic benefits will be required to settle theobligation;• The amount of the obligation can be reliably estimated.The expense relating to any provision is presented in the Statement of Comprehensive Income net of anyreimbursement.3.10 ImpairmentIntangible Assets and Property, Plant and EquipmentAssets with an indefinite useful life are not subject to amortization and depreciation but are tested forimpairment annually or more frequently if events or changes in circumstances indicate that the carryingvalue may be impaired.Assets that are subject to amortization and depreciation are reviewed for impairment whenever there is anindication that the carrying amount may not be recoverable.An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverableamount. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value inuse. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there areseparately identifiable cash in flows (cash-generating units).Impairment losses are recognized in the Statement of Comprehensive Income. Intangible assets other thangoodwill and intangible assets with indefinite useful lives and property, plant and equipment for which animpairment loss was recognized are reviewed for possible reversal of the impairment at each reporting date.Such reversal is recognized in the Statement of Comprehensive Income.66 Uster Group – Notes to the Consolidated Financial Statements 2009