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

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3. Tangible Assets
Tangible assets are valued at the costs of acquisition or manufacturing,
less the scheduled depreciation or the lower recoverable
fair market value. Scheduled depreciation is determined according
to the straight-line method.
For consumable tangible assets, the following rates of scheduled
depreciation are used:
IN %
Buildings and leasehold improvements 4.0 – 20.0
Technical equipment and machinery
Other equipment, fi xtures,
6.7 – 50.0
fi ttings and equipment 10.0 – 50.0
Low value items 100.0
Impairment losses exceeding the scheduled depreciation are
taken into account by extraordinary depreciation. If the reason for
an extraordinary depreciation ceases to exist, a respective writeup
will be carried out.
If tangible assets are closed down, disposed of or abandoned, the
resulting profi t or loss from the difference between the sales revenues
and the remaining book value are recorded as other operating
income or expenditure.
Maintenance expenses are reported as expenses in the fi nancial
year of their occurrence.
Interest on borrowed capital for tangible assets are not capitalised
if their production or acquisition comprises a longer period
of time.
4. Leased Tangible Assets
In line with IAS 17, leased tangible assets for which all essential
risks and opportunities resulting from the ownership of such asset
have been transferred (fi nance lease) are valued at their market
value or the lower present value. Such assets are depreciated over
the useful life of the asset or the shorter term of the lease contract.
Payment obligations resulting form future lease instalments are
discounted and reported under liabilities.
5. Government Grants
Government grants are recorded under liabilities and liquidated in
accordance with the useful life of the allocated asset.
6. Financial Assets
Other investments and loans are included under Other fi nancial
assets. The are valued at the costs of acquisition or the lower
market value as of the balance sheet date. Interest-bearing loans
are disclosed in the balance sheet at their nominal value.
POLYTEC
ANNUAL REPORT 2006
NOTES
The investments disclosed in the balance sheet at their costs of
acquisition are investments not listed at an active market and
whose current value can, therefore, not be determined in a reliable
manner.
Loans are subject to variable interest rates so that their book value
corresponds approximately to their market value.
All fi nancial assets are extraordinarily depreciated if an impairment
of value occurs (see the note on impairment of assets in
the Notes).
7. Inventories
Inventories are valued at the costs of acquisition or manufacturing
or at the lower recoverable market value as of the balance sheet
date. The acquisition and manufacturing costs for similar assets
are determined by applying the weighted average price method
or similar methods. Manufacturing costs include only directly allocated
expenses and pro-rata overheads. Interests for borrowed
capital are not capitalised.
8. Trade Accounts Receivables
and other Receivables
Trade accounts receivables and other receivables are capitalised
at costs of acquisition. Recognisable risks are refl ected by forming
appropriate valuation adjustments.
9. Cash and Cash Equivalents
Cash and other short-time fi nancial means consist of cash on
hand, cheques and cash at banks as well as securities and are
valued at their market value.
10. Impairment of Assets
Assets are tested at the balance sheet date if any indications exist
for an impairment. Such an annual verifi cation (impairment test)
is made for goodwill shortly prior to each balance sheet date,
regardless if any indications of impairment exist.
For the purpose of the impairment test, POLYTEC GROUP combines
all assets allocated to the smallest cash-generating level
(cash-generating unit). Goodwill is allocated to those cash-generating
units from which a synergy realisation is expected and which
represent the smallest unit subjected to the management’s supervision
of cash fl ows.
The value in use of the asset corresponds to the present value
of the estimated future cash fl ows from continuing use of such
asset and from its disposal at the end of its useful life by applying
a fair market discount rate before taxes which is adjusted to the
specifi c risks of the assets. The discount rate used for calculating
the present value represents the weighted average cost of capital
of the group and is fi xed with 8% for the fi nancial year 2006 (2005: