english - About Heraeus

In connection with the capitalization of internally generated intangible assets, a basic distinction
is made between research and development costs. Research costs are recognized
as expenses in the income statement as incurred; development costs for future products
or technologies are capitalized if the recognition criteria according to IAS 38 are cumulatively
met. If the requirements for capitalization are not met, the expenses are recognized
in the income statement in the year of their origin.
Property, plant, and equipment
The items of property, plant, and equipment are recognized at cost.
The acquisition costs cover the purchase price including the directly attributable costs
that are incurred in order make the asset ready for operation within its intended usage.
In addition to individual costs (production material and wages), the costs of conversion for
internally generated assets also include appropriate parts of the material and production
overheads incurred in production (including depreciations). Borrowing costs are generally
capitalized if the criteria for a qualifying asset are met. An asset qualifies for capitalization
of borrowing costs if the manufacturing process lasts in excess of a period of twelve
months. Financing costs that can be allocated directly are capitalized in full and financing
volume that cannot be allocated directly are capitalized proportionately.
Grants, subsidies, or similar public sector grants-in-aid are deducted from the cost of the
item.
The items of property, plant, and equipment are usually depreciated using the straight-line
method based on the economic useful life of the asset. Useful lives and depreciation
methods for property, plant, and equipment are reviewed periodically to ensure that depreciation
methods and periods reflect the expected economic benefit of the assets. Depreciation
is primarily based on the following useful lives:
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