FINANCIAL STATEMENTS 2010 - Finnlines

GOVERNMENT GRANTS
Grants to Shipping and Sea Transport Services are recognised
as an adjustment of the personnel expenses of the vessels to
which they relate. Government grants for German flagged ves-
sels are recognised in other operating expenses.
INTANGIBLE ASSETS
Intangible assets are recognised on the statement of financial po-
sition only if their acquisition costs can be reliably measured and
if it is likely that the future economic benefits from the asset will
flow to the Group.
The amortisation periods of intangible assets are based on
the following estimated useful lives:
Software 5-10 years
Other intangible assets 3-20 years
Goodwill
Goodwill arising on an acquisition of a business is carried at cost
as established at the date of acquisition of the business less accu-
mulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units that is expected to ben-
efit from the synergies of the combination. A cash-generating unit
to which goodwill has been allocated is tested for impairment an-
nually, or more frequently when there is indication that the unit may
be impaired. If the recoverable amount of the cash-generating unit
is less than its carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for
goodwill is recognised directly in profit or loss in the consolidated
statement of comprehensive income. An impairment loss recog-
nised for goodwill is not reversed in subsequent periods.
Research and development expenses
Research expenses are recognised as expenses in the reporting
period in which they arise. Development expenses are capitalised
when the company is able to determine the technical feasibility
and commercial usability of the product under development and
when the acquisition cost can be reliably calculated. Other de-
velopment expenses are recognised as expenses. Development
expenses that have previously been recognised as expenses can-
not be capitalised later. Research and development expenses
that have been recognised as expenses are included in the con-
solidated profit and loss account as other operating expenses.
Other intangible assets
Other intangible assets are valued at their acquisition cost ex-
cluding depreciation and impairments. They are amortised ac-
cording to plan and recognised as expenses during their estimat-
ed useful lives. Intangible assets with unlimited useful lives are
not amortised but are tested annually for impairment.
INVESTMENT PROPERTIES
14 FINNLINES PLC Financial Statements 2010 (figures in EUR thousand, if not stated otherwise)
Investment properties are properties held by the Group for the
purposes of gaining rent income or for value increases. Invest-
ment properties are valued according to the acquisition cost
model, at their acquisition cost excluding depreciation and im-
pairments.
Investment properties are depreciated according to Group
depreciation plans.
IMPAIRMENT
Assets are evaluated for signs of impairment. If there are signs of
impairment, the current recoverable amount of the asset in ques-
tion is calculated using the higher of its current net selling price
or its value in use.
Goodwill and intangible assets with unlimited useful lives are
tested for impairment annually.
If the book value exceeds the current recoverable amount, the
difference is recognised in the profit and loss account as an im-
pairment loss. Impairment losses recognised previously are re-
versed if the assumptions used in the calculation of the current
recoverable amount change. Impairment losses are reversed only
up to the amount corresponding to what the book value would
have been without the impairment loss. Impairment losses recog-
nised for goodwill are not reversed.
In accordance with IAS 39, all financial assets are evaluated
on each end of the reporting period to see whether there is ob-
jective evidence of impairment of an item or a group of items un-
der the financial assets. A credit loss is recognised for accounts
receivable when there is a reliable indication that it will not be
possible to collect the receivable in accordance with the original
terms. The amount of the credit loss is the difference between
the receivables' book value and realisable present value. Impair-
ment losses recognised through profit or loss for investments
in equity instruments classified as available-for-sale are not re-
versed in subsequent years' profit and loss accounts.
FINANCIAL ASSETS AND LIABILITIES
Financial assets
The Group's financial assets are classified in accordance with
the standard as follows: financial assets at fair value through prof-
it or loss, held-to-maturity investments, loans and other receiva-
bles and available-for-sale financial assets. The classification is
dependent on the original purpose of the acquisition of the finan-
cial assets. The classification is determined at the time of the ac-
quisition of the financial assets and is reviewed regularly. Trans-
action charges are included in the original book value of financial
assets for assets that are not recognised at fair value through
profit or loss. All financial asset acquisitions and sales are recog-
nised on the transaction date.
Financial assets are derecognised from the statement of fi-
nancial position when the Group loses its contractual right to
their cash flow or when the Group has transferred a significant
amount of the risks and profits outside the Group.
The “Financial assets at fair value through profit or loss” cat-