Annual Report Gorenje Group 2009

statement. The revaluation of land is based on the appraisal report prepared by an independent
appraiser. Each year, the Group is testing land for impairment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment, and are
recognised net within other income in profit or loss. When revalued assets are sold, the amounts
included in the revaluation reserve are transferred to retained earnings.
(ii) Reclassification to investment property
Property that is being constructed for future use as investment property is accounted for as property,
plant and equipment and measured at cost until construction of development is completed, at which
time it is reclassified as investment property. Any gain arising on remeasurement is recognised in profit
or loss.
(iii) Subsequent expenditure
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow
to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. All others costs, such as day-to-day servicing of property, plant and equipment, are
recognised in profit or loss as incurred.
(iv) Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter
of the lease term and their useful lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
• Buildings 20 - 50 years
• Plant and equipment 5 - 10 years
• Computer equipment 2 - 5 years
• Transportation means 3 - 10 years
• Office equipment 3 - 10 years
• Tools 3 - 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
e) Intangible assets
(i) Goodwill
Goodwill (negative goodwill) arises on the acquisition of subsidiaries, associates and joint ventures.
Acquisitions made after the IFRS transition date
In the acquisitions made on or after 1 January 2006, goodwill is recognised as the excess and/or the
difference between the cost of acquisition and the Group's share of net fair value of identified assets,
liabilities and contingent liabilities of the acquiree. If the difference is negative (negative goodwill), it is
recognised directly in profit or loss.
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Annual Report Gorenje Group 2009