Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Consolidated financial statements - NOTES<br />
| 107 ><br />
costs are charged to the consolidated statement of income during the financial period in<br />
which they are incurred.<br />
Borrowing costs that are directly attributable to the acquisition, construction or production<br />
of a qualifying item of property, plant and equipment are capitalized as part of the cost of<br />
that asset.<br />
Upon disposal or when no future economic benefits are expected from the use of an item<br />
of property, plant and equipment, its carrying amount is derecognized. The gain or loss<br />
arising from derecognition is included in profit and loss.<br />
Assets held for sale<br />
Assets held for sale include non-current assets (or disposal groups) whose carrying amount<br />
will be primarily recovered through a sale transaction rather than through continuing use<br />
and whose sale is highly probable in the short-term. Assets held for sale are measured at<br />
the lower of their carrying amount and their fair value, less costs to sell.<br />
Finance and operating leases<br />
Leases in which a significant portion of the risks and rewards of ownership are retained by<br />
the lessor are classified as operating leases. Payments made under operating leases (net<br />
of any incentives received from the lessor) are charged to the consolidated statement of<br />
income on a straight-line basis over the lease term.<br />
Leases where lessees bear substantially all the risks and rewards of ownership are classified<br />
as finance leases. Finance leases are capitalized at the lease’s commencement at the<br />
lower of the fair value of the leased property and the present value of the minimum lease<br />
payments.<br />
Each finance lease payment is allocated between the liability and finance charges. The<br />
corresponding rental obligations, net of finance charges, are included in “long-term debt”<br />
in the statement of financial position. The interest element of the finance cost is charged<br />
to the consolidated statement of income over the lease period. The assets acquired under<br />
finance leases are depreciated over the shorter of the useful life of the asset and the lease<br />
term.<br />
Intangible assets<br />
(a) Goodwill<br />
Goodwill represents the excess of the cost of an acquisition over the fair value of the<br />
Group’s share of the net identifiable assets of the acquired subsidiary at the date of<br />
acquisition. Goodwill is tested at least annually for impairment and carried at cost<br />
less accumulated impairment losses. Impairment losses on goodwill are not reversed.<br />
Gains and losses on the disposal of an entity include the carrying amount of goodwill<br />
relating to the entity sold.