A rePort: How is a head- liner actually produced? friedrich ... - polytec

sure of balance sheet silent reserves, irrespective of the amount
of such minority interests). The carrying amount of participations
is compared with the revalued equity of the subsidiary (purchase
accounting).
Remaining differences will be capitalised as goodwill. Any goodwill
arising before January 1, 2005, is recognized at its carrying
amount as of December 31, 2004 and subjected to an annual
impairment test.
If the net assets exceed the costs of acquisition, any difference
(negative goodwill) is recognized in the profi t and loss statement in
the year of acquisition. Neither goodwill nor badwill resulted from
the initial consolidation effected during this year.
Minority interests in the equity and the result of the companies
controlled by the parent company are disclosed in the Consolidated
Financial Statements under equity in accordance with the
provisions of IAS 27.
All accounts receivables and payables, expenses and revenues
resulting from transactions between the consolidated companies
were eliminated by taking into account the principle of signifi -
cance. Intermediate results from intra-group deliveries were eliminated
as well, unless such are of signifi cance.
3. Foreign Currency
Operating Transactions in Foreign Currency
All transaction in foreign currencies were valued at the exchange
rate of the transaction in the individual group companies.
Monetary assets and liabilities in foreign currencies are converted
at the exchange rate as of the balance sheet date. Resulting
exchange rate differences are recorded in the Consolidated
Income Statement.
Translation of individual Financial Statements
in a Foreign Currency
The functional currency of subsidiaries located outside the euro
zone is the respective national currency. Assets and liabilities of
foreign subsidiaries were translated at the average exchange rate
as of the balance sheet date. Items in the Consolidated Income
Statement were translated using the average exchange rates of
the fi nancial year.
Non-monetary assets and liabilities in foreign currencies were translated
using the exchange rate applicable at the transaction date. Any
exchange rate differences for monetary items that, in an economic
sense, belong to a participation in a foreign company, as for example
long-term receivables and loans, are set-off with the group’s
equity without affecting the Consolidated Income Statement and
disclosed under “Differences from foreign currency translation”.
C. ACCOUNTING POLICIES AND
VALUATION PRINCIPLES
The principles of consistent accounting and valuation have been
complied with by applying uniform guidelines for all consolidated
companies. Immaterial deviations in the individual fi nancial statements
of foreign group companies have not been adjusted.
1. Intangible Assets
Intangible assets are measured at the cost of acquisition and
depreciated using the straight-line method. Amortisation rates
vary between 10.0% and 66.7%.
Expenses for research are recognized as an expense in the year
of their occurrence. Development costs are generally accounted
as period expenses as well. Such costs may only be capitalised if
certain conditions are met veritably and cumulatively. For instance,
it must be proven that the development activity will, with suffi cient
probability, result in future revenues covering not only normal costs
but also the relevant development costs. Capitalised development
costs for customer orders are amortised with the beginning of the
serial delivery in accordance with the customer’s release orders
for the entire term of the model. The group’s research and development
expenses in the fi nancial year amounted to approx. 3.0%
(previous year: 2.6%) of its sales.
2. Goodwill
NOTES
57
Goodwill results from the acquisition of subsidiaries or shares
in associated companies. Since January 1, 2005, goodwill is no
longer amortised over its lifetime but subjected to an impairment
test at least once per year. If a subsidiary or an associated company
is sold, the proportional goodwill is taken into account in the
calculation of the gain or loss of such disposal.
Goodwill is valued at the costs of acquisition minus cumulative
impairment losses (see the note on impairment of assets in the
Notes).
POLYTEC
ANNUAL REPORT 2006