Technologies · Systems · Solutions - Dürr

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Impairment test
Government grants
Leases
All intangible assets with an indefinite useful life and goodwill are tested for impairment at the
end of each reporting period. The impairment test is performed annually as of December 31.
Other intangible assets and property, plant and equipment are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.
If the net realizable amount of the asset falls short of the carrying value, an impairment loss is
recognized in the income statement. The recoverable amount is the higher of an asset’s net sales
price and its value in use. The net sales price is the amount recoverable from the disposal of the
asset at customary market conditions less sales costs. Value in use is the fair value of the estimated
future cash flow expected to arise from the continuing use of an asset and from its disposal at
the end of its useful life. The recoverable amount is determined for each asset individually or, if
that is not possible, for the cash-generating unit to which the asset belongs. As regards goodwill
acquired in business combinations, the relevant cash-generating units correspond to the business
units of the Dürr Group based on internal reporting structures.
To determine the estimated cash flow of each cash-generating unit, basic assumptions have to
be made. These include assumptions regarding financial planning and the interest rates used for
discounting.
A reversal of impairment losses recognized in prior years is recorded where there is an indication
that the impairment losses recognized for the asset no longer exist or have decreased. The
reversal is posted as a gain to the income statement. The increase in value or the reduction of
an impairment loss of an asset is, however, only recorded to the extent that it does not exceed
the carrying value that would have existed if the regular amortization or depreciation had been
recorded and no impairment losses had been recognized. Write-downs on goodwill recorded as
a result of impairment tests may not be reversed.
According to IAS 20 (Accounting for Government Grants and Disclosure of Government
Assistance), government grants are only recorded if it is reasonably certain that the conditions
attached to the grants will be fulfilled and the grants actually awarded. Grants are deducted
from the carrying amount of the subsidized asset.
The companies in the Dürr Group are lessees of land, buildings and office and operating equipment.
The majority of leases are classified as operating leases.
When the leases meet the definition of finance leases, the leased asset is recognized at acquisition
cost (net present value of future minimum lease payments less costs incurred for insurance,
maintenance and taxes on any profit thereon). A liability is also established at that time for the
same amount. The upper limit for the recognition of a leased asset and the liability is its fair value.
The leased asset is depreciated over the shorter of the lease term and its estimated useful life.
Interest is imputed on the obligation using the effective interest method over the lease term.
Lease payments on operating leases are recorded as an expense in the income statement on a
straight-line basis over the term of the lease.