Annual Report 2010 - AdP

Land is not depreciated.
Depreciation of assets that are earmarked for sale shall be suspended and they shall become classified as held for sale.
Whenever there are indications of a loss of value in tangible fixed assets, impairment tests are conducted in order to estimate the
recoverable value of the asset and, when necessary, record a loss due to impairment. The recoverable value is calculated as the
higher value between the net sale price and the use value of the asset, the latter being calculated on the basis of the current value
of future estimated cash flow, resulting from continued use and from the sale of the asset at the end of its useful life.
At the end of each financial year, the Board of Directors shall review the depreciation methods and the estimated useful lives of
each asset in order to accurately reflect the patterns of consumption of the benefits of the assets during the years they are used by
AdP. Any changes in these criteria shall be considered an accounting estimate change and subject to prospective application.
Gains or losses ensuing from the write-off or sale shall be calculated on the basis of the difference between the revenue from the
sale and the book value of the asset, and shall be recorded as income or cost in the income statement.
2.4.1 Leasing
Leasing of assets, over which AdP substantially holds all risks and benefits related to ownership of the asset, are classified as financial
leasing. Agreements in which the analysis of one or more particular situations of the contract points to this type of situation are also
classified as financial leasing, this classification being made in accordance with the substance and not the form of the contract. Financial
leasing is capitalized at the start of the lease at the lower value between the fair value of the leased asset and the present value of
the minimum leasing payments - the responsibility recorded under Other long-term liabilities, net of financial charges. Assets acquired
through financial leasing are depreciated by the lesser of either the useful life period of the asset or the term of the leasing agreement.
All other leases shall be classified as operational leases. Underlying payments are recorded as costs on a straight line basis during the
lease period.
2.5 Intangible Assets
2.5.1 Other Intangible Assets
All other intangible assets (software development costs, intellectual property costs and other rights) are stated at their net cost of
accumulated depreciation. These items are normally depreciated on a straight line basis for a period of three to ten years. Investments
that increase the performance of software programs beyond their original specifications are added to the original cost of the software.
Software implementation costs recognized as assets are depreciated on a straight line basis over their useful lives, namely 3 to 6
years. The corporate and trading systems of most of the group developed using SAP platforms are depreciated on a straight line
basis over their useful lives of 10 years.
2.6 Investment properties
AdP investment properties include buildings owned for the purpose of receiving rental income, earning capital gains or both.
Investment properties are initially valued at cost, including directly attributable transaction costs. After initial recognition, investment
properties are valued at depreciated cost. Investment properties are written off when sold or when they are permanently removed
from usage and no economic benefits are expected from their sale. Costs related to investment properties in use, namely
maintenance, repair, insurance and taxes, are recognized as costs incurred during the year they pertain to. Improvements that are
expected to generate additional future economic benefits are capitalized under the Investment property item.
2.7 Financial assets and liabilities
2.7.1 Classification of financial assets
AdP financial assets are classified under the categories identified below. Classification depends on the objective of acquisition of the
investment and is determined at the time of initial recognition (trade date) of the investments and revalued at each subsequent
reporting date. The Board of Directors classifies its investments at the acquisition date and revaluates this classification on a regular
basis. AdP classifies its financial assets under the following categories: i) loans and accounts receivable; ii) investments held until
maturity; iii) investments valued at fair value under results (held for trading); iv) financial assets available for sale.
AdP Group_Annual Report 2010_130|131