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Accounting and valuation principles
Tangible assets are capitalized at acquisition or production cost. In the case of assets produced by Group companies, production cost also includes directly attributable cost as well as pro-rata overheads and depreciation.
Expenditure for repairs and maintenance is generally shown as expenses. Such expenditure is only capitalized if it results in an extension or significant improvement in the asset concerned.
Movable fixed assets and industrial buildings are depreciated in accordance with actual use. This approach normally corresponds to straight-line depreciation.
Systematic depreciation is effected on the basis of the following useful lives:
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Industrial buildings |
max. 50 years |
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Machinery and equipment |
5 to 25 years |
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Other fixtures, fittings and
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4 to 20 years |
In addition, an impairment loss is recognized if the net selling price or value in use of an asset falls below the book value. If the impairment of an asset reflected by a write-down in the past is reduced or eliminated, the impairment loss is reversed. The updated acquisition or production cost represents the upper limit of valuation in such cases.
Taxable grants and tax-free investment subsidies received in connection with fixed assets, normally paid by public bodies, are set off against acquisition or production costs.
In accordance with IAS 17, fixed assets leased under finance leases are recognized as assets and written off over their economic useful life if substantially all the risks and rewards associated with the ownership of the leased asset lie with the lessee. Such assets are carried at the fair value of the leased asset at the inception of the lease or, if lower, at the present value of the minimum lease payments. A liability of the same amount is also shown on the balance sheet.