AT&S World

Consolidated Financial Statements as of 31 March 2011
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h. Impairment losses and reversals of impairment losses of
property, plant and equipment, intangible assets and noncurrent
assets held for sale
The Group regularly reviews the carrying amounts of its property,
plant and equipment and intangible assets for possible
impairment. If the recoverable amount of an asset is below its
carrying amount, an impairment loss amounting to the difference
is recognised. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. The value
in use corresponds to the estimated future cash flows expected
from the continued use of the asset and its disposal at the end
of its useful life.
Goodwill is tested annually for impairment. If events during the
financial year or changes in circumstances indicate that goodwill
might be impaired, an impairment test will be carried out
immediately. Goodwill is allocated to cash-generating units for
the purpose of impairment testing.
Non-current assets are classified as held for sale and measured
at the lower of their carrying amounts or fair values less costs
to sell, if their carrying amount will be recovered by sale rather
than by continuing use in the business.
If the reason for the impairment recognised in the past no longer
exists, with the exception of goodwill, a reversal of impairment
up to amortised cost is made.
i. Inventories
Inventories are stated at the lower of cost or net realisable value.
Net realisable value is the estimated selling price in the ordinary
course of business, less variable costs necessary to make the
sale. Cost is determined by the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises raw
materials, direct labour, other direct costs and related production
overheads, but excludes interest expense.
j. Trade and other receivables
Receivables are reported at nominal values, less any allowances
for doubtful accounts. Foreign currency receivables are
translated at the exchange rate prevailing at the balance sheet
date. Risk management provides for all recognisable credit and
country-specific risks.
k. Financial assets
The purchase or sale of financial assets shall be recognised and
derecognised, as applicable, using trade date accounting or settlement
date accounting. The fair values recognised in the balance
sheet generally correspond to market prices of financial
assets. Except for financial assets “at fair value through profit
or loss” they are recognised initially including transaction costs.
Financial assets are divided into categories explained below. The
classification depends on the respective purpose of the financial
asset and is reviewed annually.
Financial assets at fair value through profit or loss
Financial instruments acquired primarily for the purpose of
earning a profit from short-term fluctuations of prices or trader
margins are classified as financial assets at fair value through
profit or loss. At the time of their acquisition they are stated
at cost, excluding transaction costs, in subsequent periods at
their respective fair values. Realised and unrealised profits and
losses are credited or charged to the income statement under
“Financial result”. This relates primarily to securities held for
trading. Derivative financial instruments also fall into this category,
unless hedge accounting is applied (refer to l. Derivative
financial instruments).
Securities held to maturity
Securities held to maturity are recognised at amortised cost using
the effective interest rate method. Any impairment is recognised
in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments which are not quoted in an active
market. In the balance sheet the respective assets are recognised
under the item “trade and other receivables”.
Financial assets available for sale
Financial assets available for sale, on the one hand, relate to
securities available for sale. Securities available for sale are instruments
which management intends to sell as a reaction to or
due to expected liquidity requirements or expected changes in
interest rates, exchange rates or share prices. Their classification
as non-current or current assets depends on the expected
time to be held.