Annual Report Gorenje Group 2009

(iv) Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
intangible assets from the date that they are available for use. The estimated useful lives for the current
and comparative periods are as follows:
Patents and trademarks
Capitalised development costs
10 years
10 years
f) Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business, use in the production or supply of goods or services
or for administrative purposes. Investment property is measured at fair value (see note 4(iii)), with any
change therein recognised in profit or loss.
Property rented to a subsidiary and associated with the conduct of the Company's business activities,
is accounted for as an item of property, plant and equipment. Investment property also includes
property, of which more than 50% of the available surface area is leased out.
When the use of a property changes such that it is reclassified as property, plant and equipment, its fair
value at the date of reclassification becomes its cost for subsequent accounting.
g) Leased assets
Leases in terms of which the Company assumes substantially all the risks and rewards of ownership
are classified as finance leases. Upon initial recognition the leased asset is measured at an amount
equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent
to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to
that asset.
Other leases are operating leases and, except for investment property, the leased assets are not
recognised in the Company's statement of financial position. Investment property held under an
operating lease is recognised in the Company's statement of financial position at its fair value.
h) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based
on the weighted average price method, and includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred in bringing them to their existing location and
condition. In the case of manufactured inventories and work in progress, cost includes an appropriate
share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
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Annual Report Gorenje Group 2009