Technologies · Systems · Solutions - Dürr

Investments in associates
Financial instruments
Other financial assets
Consolidated financial statements of Dürr AG
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Companies over which Dürr does not exert a significant influence are recorded as investments in
associates. The Group’s share of profits and losses is shown in the consolidated balance sheet
as a change in the carrying amount and recognized in the consolidated income statement under
share of profit of associates. Dividends received are deducted from the carrying amount.
Pursuant to IAS 39, financial instruments are classified in the following categories:
financial assets held for trading
held-to-maturity investments
loans and receivables originated by the enterprise and
available-for-sale financial assets.
Financial assets with fixed or determinable payments and fixed maturity that the Company
intends and has the ability to hold to maturity – other than loans and receivables originated by the
enterprise – are classified as held-to-maturity financial assets. Financial assets that are acquired
principally for the purpose of generating a profit from short-term fluctuations in price are classified
as held-for-trading financial assets. All other financial assets apart from loans and receivables
originated by the company are classified as available-for-sale financial assets.
Held-to-maturity financial assets are disclosed under non-current assets unless they are due
within 12 months of the balance sheet date. Held-for-trading financial assets are disclosed
under current assets. Available-for-sale financial assets are disclosed under current assets if
the management intends to sell them within 12 months of the balance sheet date.
Purchases or sales of financial assets are accounted for using the trade date method.
The initial recognition of a financial asset is at cost, which corresponds to the fair value of the
consideration given or received; transaction costs are included.
Changes in the fair value of held-for-trading financial assets are recorded in the net profit or loss.
For this purpose, the fair value of a financial instrument is the amount that can be generated
for the asset in an arm’s length transaction between knowledgeable and willing parties, under
current market conditions.
Held-to-maturity financial assets are measured at amortized cost using the effective interest
rate method. If it is more likely than not that the value of financial assets measured at amortized
cost is impaired, the impairment is recorded against earnings. If an impairment loss recorded
in a prior period decreases and the decrease in the impairment (or a write-up) can be objectively
related to an event occurring after the impairment loss, the write-up is included in net profit
or loss. A write-up cannot, however, exceed the carrying value that would have been recognized
without the impairment.
Loans and receivables originated by the enterprise and not held for trading are measured at
amortized cost or the lower net realizable value on the balance sheet date.
Available-for-sale financial assets are accounted for at market value. Unrealized gains and losses
are disclosed in other comprehensive income, net of a tax portion. The reserve is released to profit
or loss either upon disposal or if it is impaired.
The marketable securities disclosed under other financial assets are classified as available-for-sale
securities and therefore measured at market value on the balance sheet date. There were no
adjustments to other comprehensive income in the reporting periods 2004 and 2003 as the
unrealized changes in fair value were immaterial.