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Impairment of property, plant, and equipment and intangible assets (excluding goodwill)
An assessment is made at each balance sheet date as to whether there are indications that an asset
might be impaired. If there are indications that an item of property, plant, and equipment or an
intangible asset is impaired, the carrying amount of that asset is compared with its recoverable
amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and its value
in use.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length
transaction between knowledgeable, willing, and independent parties, less the costs of disposal.
Value in use is the present value of the future cash flows expected to be derived from an asset.
If the carrying amount exceeds the higher of the two amounts (fair value less costs to sell or value in
use), an impairment loss is recognized and the carrying amount of the asset is reduced to the
recoverable amount.
If the reason for an impairment loss recognized on property, plant, and equipment and intangible
assets (excluding goodwill) in prior periods no longer applies, the impairment loss is reversed up to
the amount of the asset’s amortized cost.
Goodwill
Purchased goodwill is capitalized and, in accordance with IAS 36, tested for impairment at least once
a year or whenever there are indications that the unit could be impaired. The recoverability of
goodwill is tested in a single-step procedure at the level of the cash-generating unit to which it is
allocated. In accordance with the definition of a cash-generating unit, the strategic business units of
the Pfleiderer Group are generally deemed to be cash-generating units. They represent the reporting
level below the Business Centers (reportable segments).
The impairment test compares the carrying amount of the cash-generating unit with its recoverable
amount. If the carrying amount exceeds the recoverable amount, the carrying amount is impaired and
it must be written down to the recoverable amount.
The recoverable amount of a cash-generating unit is the higher of its fair value less costs to sell and
its value in use.
Goodwill impairment losses recognized in previous periods may not be subsequently reversed if the
reasons for impairment no longer apply.
Non-current financial assets
Securities and other equity investments in particular are reported as non-current financial assets.
Regular way purchases or sales of financial instruments are recognized at the settlement date, which
is the date that the asset is delivered.
IAS 39 distinguishes between financial assets at fair value through profit or loss, investments held to
maturity, loans and receivables, and available-for-sale financial assets.
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