TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

The depreciation base is measured at cost less residual
value and any write-downs. Depreciation is provided on a
straight-line basis over the estimated useful lives of the
assets. The main depreciation periods are as follows:
Buildings
Telecommunications installations
Other installations
20 years
3-20 years
3-15 years
The assets’ useful lives and residual values are reviewed
regularly. If the residual value exceeds the asset’s carrying
amount, depreciation is discontinued.
Property, plant and equipment that have been disposed of
or scrapped are eliminated from accumulated cost and
accumulated depreciation. Gains and losses arising from
sale of property, plant and equipment are measured as the
difference between the sales price less selling expenses and
the carrying amount at the time of sale. The resulting gain
or loss is recognised in the Income Statements under Other
income and expenses.
Software that is an integral part of for example telephone
exchange installations is presented together with the
related assets. Useful lives are estimated individually.
Installation materials are measured at the lower of weighted
average cost and recoverable amount.
Customer-placed equipment (e.g. set-top boxes) are
capitalised and depreciated over the estimated useful life of
the individual asset, not exceeding five years.
Leased property, plant and equipment that qualify as
finance leases are recognised as assets acquired.
Property, plant and equipment are recognised at the lower
of recoverable amount and carrying amount.
Investments in joint ventures and associates
Investments in joint ventures and associates are recognised
under the equity method.
A proportional share of the enterprises’ income after
income taxes is recognised in the Income Statements.
Proportional shares of intra-group profit and losses are
eliminated.
Investments in joint ventures and associates are recognised
in the Balance Sheets at the proportional share of the
TDC Group Annual Report 2011
entity’s equity value calculated in accordance with Group
accounting policies with the addition of goodwill.
Joint ventures and associates with negative equity value are
measured at DKK 0, and any receivables from these
enterprises are written down, if required, based on an
individual assessment. If a legal or constructive obligation
exists to cover the joint venture’s or associate’s negative
balance, an obligation is recognised.
Other investments
Other investments whose fair value cannot be reliably
determined are recognised at cost. The carrying amount is
tested for impairment annually and written down in the
Income Statements. When a reliable fair value is
determinable, such investments are measured accordingly.
Unrealised fair value adjustments are recognised directly in
equity except for impairment losses and translation
adjustments of foreign currency investments that are
recognised in the Income Statements. The accumulated fair
value adjustment recognised in equity is transferred to the
Income Statements when realised.
Inventories
Inventories are measured at the lower of weighted average
cost and net realisable value. The cost of merchandise
covers purchase price and delivery costs.
Receivables
Receivables are measured at amortised cost. Write-downs
for anticipated doubtful debts are based on individual
assessments of major receivables and historically
experienced write-down for anticipated losses on uniform
groups of other receivables.
Contract work in progress
Contract work in progress is measured at the selling price of
the work performed and recognised under receivables. The
selling price is measured at cost of own labour, materials,
etc., and the addition of a share of the profit based on the
stage of completion. The stage of completion is measured
by comparing costs incurred to date with the estimated
total costs for each contract.
Write-downs are made for anticipated losses on work in
progress based on assessments of estimated losses on the
individual projects through to completion.
Payments on account are offset against the value of the
individual contract to the extent that such invoicing does
not exceed the amount capitalised. Received payments on
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