Annual report 2005 - Sava dd

| notes to the consolidated financial statements in accordance with IFRS |
1 5 3 |
Reversals of impairment
An impairment loss in respect of an investment in an
equity instrument classified as available for sale is not
reversed through profit or loss. If the fair value of a debt
instrument classified as available for sale increases and
the increase can be objectively related to an event
occurring after the impairment loss was recognised in
profit or loss, the impairment loss shall be reversed, with
the amount of the reversal recognised in profit or loss.
In respect of other assets, an impairment loss is reversed
if there has been a change in the estimates used to
determine the recoverable amount.
An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had
been recognised.
m) Share capital
Repurchase of share capital
When share capital recognised as equity is repurchased,
the amount of the consideration paid, including directly
attributable costs, is recognised as a change in equity.
Repurchased shares are classified as treasury shares and
presented as a deduction from total equity.
Dividends
Dividends are recognised as a liability in the period in
which they are declared.
n) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at
fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are
stated at amortised cost with any difference between
cost and redemption value being recognised in the
income statement over the period of the borrowings on
an effective interest basis.
o) Provisions
A provision is recognised in the balance sheet when the
Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow
of economic benefits will be required to settle the
obligation. If the effect is material, provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where
appropriate, the risks specific to the liability.
Provisions for severance and employee jubilee benefits
The company pays contributions for health insurance,
pension and social insurance fund from gross salaries
during the year at statutory defined rates. Contributions
are recognised as an expense in the income statement as
incurred.
As stipulated by the legislation, collective agreement
and internal regulations the Group is committed to pay
employee jubilee benefits and severance upon their
retirement, for which long-term provisions are formed.
No other liabilities due to pension exist.
Provisions are formed in the amount of benefit that
employees have earned in return for their service in the
current and prior periods, discounted at the balance
sheet date. The calculation for every employee
considers expense for severance upon retirement and all
expected jubilee benefits until their retirement. The
chosen discount interest rate is 2.75% annually and
represents the real interest rate. The calculation is
performed by a qualified actuary using the projected
unit method.
Warranties
A provision for warranties is recognised when the
underlying products or services are sold. The provision
is based on historical warranty data and a weighting of
all possible outcomes against their associated
probabilities.
Restructuring
A provision for restructuring is recognised when the
Group has approved a detailed and formal restructuring
plan, and the restructuring has either commenced or has
been announced publicly. Future operating costs are not
provided for.
p) Trade and other payables
Trade and other payables are stated at cost.