Annual Report Gorenje Group 2009

value of the derivative is recognised immediately in profit or loss. If the hedging instrument no longer
meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is
revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously
recognised in other comprehensive income and presented in the hedging reserve in equity remains
there until the forecast transaction affects profit or loss. When the hedged item is a non-financial asset,
the amount recognised in other comprehensive income is transferred to the carrying amount of the
asset when the asset is recognised. In other cases the amount recognised in other comprehensive
income is transferred to profit or loss in the same period that the hedged item affects profit or loss.
Other derivative financial instruments (Other non-trading derivatives)
When a derivative financial instrument is not held for trading, and is not designated in a qualifying
hedge relationship, all changes in its fair value are recognised immediately in profit or loss.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options are recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, which
includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity.
Repurchased shares are classified as treasury shares and are presented as a deduction from total
equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as
an increase in equity, and the resulting surplus or deficit on the transaction is transferred to retained
earnings and/or share premium.
Dividends are recognised under liabilities in the period in which the resolution of the Shareholders'
Meeting on payment of dividends is adopted.
d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructed
assets includes the cost of materials and direct labour, any other costs directly attributable
to bringing the assets to a working condition for their intended use, the costs of dismantling and
removing the items and restoring the site on which they are located.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying item of
property, plant and equipment were capitalised subject to the following conditions: if the value of
qualifying asset in total sales exceeded 5%, and if the duration of construction exceeded 6 months.
When parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
Fair value model or revaluation model is applied to land. The effect of revaluation is recorded in other
comprehensive income. Impairment of land previously increased in value results in a decrease in
revaluation surplus in other comprehensive income; otherwise, it is recognised in the income
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Annual Report Gorenje Group 2009