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Accounting and valuation principles
The consolidated financial statements are based on the annual accounts of Freudenberg & Co. and the consolidated companies. All the annual accounts concerned were drawn up as of December 31, 2003.
In accordance with IAS 27, the accounts of the individual companies to be included in the consolidated financial statements have been drawn up applying uniform accounting and valuation methods.
The requirement for the reversal of the impairment of assets has been complied with both for fixed and for current assets. Unless individual standards call for a different valuation, the updated acquisition or production cost represents the upper limit of valuation in such cases.
Borrowing costs are not capitalized as part of acquisition or production cost.
Acquired intangible assets are capitalized at acquisition cost and depreciated on a systematic basis.
Systematic depreciation is based on the following useful lives:
|
Software |
3-8 years |
|
Patents and licenses |
depending on contract term |
|
Goodwill |
generally 15 years |
In the income statement, depreciation on capitalized goodwill is shown under
depreciation of tangible and intangible assets.
Internally generated intangible assets are carried as assets at production cost and depreciated in a systematic fashion over their useful lives, provided that such assets meet the requirements of IAS 38.