ANNUAL REPORT 2008 - Gorenje Group

146
2008
ed use. Borrowing costs related to the development of qualifying assets are recognised in profit or
loss as incurred. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated
impairment losses.
(iii) Other intangible assets
Other intangible assets that are acquired by the Company, which have finite useful lives, are measured
at cost less accumulated amortisation and accumulated impairment losses.
(iv) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied
in the specific asset to which it relates. All other expenditure, including expenditure on internally
generated goodwill and brands, is recognised in profit or loss as incurred.
(v) 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 leased by the Company to subsidiaries for conducting activities is recorded within the
item of property, plant and equipment. The item of investment property includes property, whose
lease holders use more than 50% of available area.
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 of depreciation.
(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. The leased assets are not recognised on the Company’s balance
sheet.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories of
materials and merchandise 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