Annual Report Gorenje Group 2009

j) Non-current assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be
recovered primarily through sale rather than through continuing use, are classified as held for sale.
Immediately before classification as held for sale, the assets, or components of a disposal group, are
remeasured in accordance with the Group's accounting policies. Thereafter generally the assets, or
disposal group, are measured at the lower of their carrying amount and fair value less cost to sell. Any
impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and
liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax
assets, employee benefit assets, investment property, which continue to be measured in accordance
with the Group's accounting policies. Impairment losses on initial classification as held for sale and
subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not
recognised in excess of any cumulative impairment loss.
k) Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as
the related service is provided.
l) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability.
(i) Warranties
A provision for warranties is recognised when the underlying products or services are sold. The
provision is based on historical warranty data and a weighting of all possible outcomes against their
associated probabilities.
A provision for warranties is reduced directly by costs for which it has been created. It means that such
costs are no longer recorded in the income statement. At the end of the period for which provisions
have been created, the unused portion of provisions is transferred to other operating income.
(ii) Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been announced publicly.
Future operating losses are not provided for.
(iii) Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group
from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The
provision is measured at the present value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract. Before a provision is established, the Group
recognises any impairment loss on the assets associated with that contract.
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Annual Report Gorenje Group 2009