Business Report 2005 - Interseroh

the contract at the cash values of the minimum leasing payments taking one-off payments into
consideration or at the lower fair values. They are written off by scheduled depreciation over their
normal period of economic use. If later transfer of ownership of the leased object is uncertain, the term
of the leasing contract is used as basis insofar as it is shorter. The payment obligations resulting from
the future leasing instalments are stated as financial liabilities.
The obligations to return the property to its original condition are included in the acquisition or
production costs of the asset concerned at the amount of the discounted performance sum and written
off linearly as scheduled depreciation over the normal period of use of the asset. The expected
liabilities are shown as provisions.
The costs for the repair of property, plants and equipment are generally netted out with effect
on net income. They are only capitalised if the costs result in an addition or significant improvement to
the respective asset.
The immovable property, plants and equipment (buildings and structures) are depreciated
linearly over the expected period of economic use. This also applies to movable property, plants and
equipment. When determining the depreciation sums, significant residual values remaining at the end
of the normal period of use are taken into consideration.
The retirement of minor fixed assets in the financial year is assumed.
When selling or closing down property, plants and equipment, the profit or loss from the
difference between the sales proceeds and residual book value are stated under other operating
income or expenses as the case may be.
The scheduled depreciations are based on the following periods of use and depreciations rates
standardised throughout the group:
Period of use Depreciation rate
Years %
Land and buildings
Business and factory premises and other buildings 25-50 2.00-4.00
Outdoor installations 5-33 3.33-20.00
Technical equipment and machinery 4-33 3.33-25.00
Other facilities, fittings and equipment
Vehicles 6-9 11.11-20.00
Fittings, office machines and equipment 3-25 4.00-33.33
Minor assets (up to EUR 410) < 1 year 100.00
Extraordinary depreciations may be effected in the course of the impairment tests performed
at least once a year. When the reasons for extraordinary depreciations disappear, corresponding
appreciations are effected.
The holdings valued at equity are initially entered with their acquisition costs and updated by
the equity method. If in the course of initial consolidation of these holdings hidden reserves or liabilities
were uncovered, they are – if applicable, taking the depreciations by the criteria already named into
consideration – also contained in this balance sheet item.
According to IAS 39 (Financial Instruments: Recognition and Measurement), financial assets
must among others be differentiated between “keep to maturity” and “available for sale”. They are
stated at their fair value or, if a fair value on an active market is not available and the fair value cannot
be measured reliably, at their updated acquisition costs.
At INTERSEROH both the long-term and the short-term financial assets are classified as
“available for sale” and valued at updated acquisition costs because their fair values cannot be
measured reliably.
Interest-free and low-interest loans are reported in the balance sheet at cash value and the
other loans at updated acquisition costs.
The raw materials, supplies and merchandise reported under inventories according to IAS 2
(Inventories) are valued at the lower value of average acquisition or production costs and their net
sales value, i.e. the sales proceeds achievable in the normal course of business less the estimated
completion and sales costs (principle of loss-free valuation). Apart from the individual costs, the
production costs also include reasonable shares of the necessary fixed and variable material and
production overheads insofar as they were incurred in connection with the production process. Costs
for administration are taken into consideration insofar as they fall on the production section.
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