IMMOEAST Annual Report 2006/07

172 IMMOEAST Annual Report 2006/07
IAS 21.1
IAS 21.32
IAS 38.8
IAS 38.12
(a), (b)
IAS 38.24
IAS 38.33
IAS 38.34
IAS 38.111
3. Accounting and valuation principles
3.1 Change in accounting and valuation methods
In contrast to the published consolidated financial statements as of 30 April 2006, this annual report applies the
revised IAS 21 as amended on 15 December 2005. The objective of this standard is to regulate the inclusion of transactions
in foreign currencies and foreign operations in the financial statements of an entity, and also define how to
translate financial statements into a presentation currency. In accordance with IAS 21 (revised 2005), foreign
exchange gains and losses arising from long-term intercompany loans with indefinite repayment periods may no
longer be recognised to the income statement through profit or loss but must be recognised directly in equity. These
foreign exchange gains and losses are shown on the statement of changes in shareholders’ equity under the position
“foreign exchange gains/losses according IAS 21.32”. Foreign exchange gains and losses arising from long-term
intercompany loans relate to receivables and/or liabilities that may be called at any time. Therefore, these items do
not meet the requirements of IAS 21.32 and are recognised to the income statement through profit or loss.
3.2 Intangible assets
Additional information on intangible assets is provided under point 4.3.1.
IAS 38 defines intangible assets as identifiable, non-monetary assets without physical substance, which can be
expected to generate a future economic benefit. The three characteristics of intangible assets are: identifiability,
control (over the use of the asset) and future economic benefit (income or future cost savings). The identifiability of
intangible assets is coupled either with the capability of being sold or transferred (either alone or together with other
assets or liabilities) or with a contractual or legal right. In accordance with IAS 38, intangible assets are carried at
cost less amortisation.
If an intangible asset is acquired in a business combination in accordance with IFRS 3, the cost of this asset equals
its fair value on the date of acquisition. The value of the intangible asset is subsequently reassessed in connection
with the recognition of the business combination. The acquirer must record the intangible assets of the acquired
company separately from goodwill as of the acquisition date, independent of whether the asset was recognised or
not recognised by the acquired company prior to the business combination. In this case, the cost of the intangible
asset is identical to fair value as of the acquisition date. The fair value of an intangible asset reflects the market
expectations for the probability that the future economic benefits embodied in the asset will flow to the acquirer. The
only circumstances in which it might not be possible to reliably measure the fair value of an intangible asset are when
the asset is not separable from the entity, or there is no reliable data on exchange transactions for the same or similar
assets and the estimate of fair value would be dependent on immeasurable variables.
All intangible assets – with the exception of goodwill – have a finite useful life and are amortised on a systematic
basis.
Ordinary straight-line amortisation is based on the following useful lives:
Useful life in years
Other intangible assets 3-50
In addition, intangible assets are tested for impairment in accordance with IAS 36.