english - About Heraeus

22
The classification depends on the purpose for which the financial assets and financial
liabilities were acquired. The category “available-for-sale” includes financial instruments
that are not loans or receivables or financial investments held to final maturity and that
are not measured at fair value through profit or loss. Management determines the classification
of financial assets and financial liabilities at the time of initial recognition and
reviews the classification at each closing date.
In general, purchases and sales of financial instruments that are usual within the market
are reported as of the settlement date. Derivatives are recorded as of the trading date.
The initial measurement is based on cost plus transaction costs. The subsequent measurement
depends on the classification of the financial assets and financial liabilities.
Impairment losses may be recognized on individual financial instruments in case of objective
evidence and if the full amount of future cash flows cannot be expected. Objective
evidence of impairment losses may be said to exist if the debtor’s creditworthiness deteriorates
or if the performance of market values remains low for a sustained period. If the
reasons for impairment no longer exist, the impairment loss is reversed.
Non-derivative financial instruments
Loans and receivables, held-to-maturity investments, and financial assets as well as financial
liabilities without a quoted market price on an active market are measured at amortized
cost using the effective interest method.
Available-for-sale financial assets and financial liabilities as well as held-for-trading financial
assets and financial liabilities are measured at their fair value based on their quoted
market value as of the closing date.
Other investments must be classified as available-for-sale financial assets. Since no active
market exists for them, they are measured at amortized cost.