Financial Information - Uralita

ANNUAL REPORT 2006
FINANCIAL INFORMATION
the Group’s consolidated annual accounts in
compliance with the IFRS adopted by the
European Union are as follows:
4.1. Goodwill
Goodwill, which is only recognized when
acquired in exchange for payment, entails the
positive or negative difference between the
acquisition cost of a holding in a company and
its underlying carrying amount at acquisition
date that could not be allocated to a specific
asset.
at acquisition or production cost and
subsequently carried at cost less any
accumulated amortization and any accumulated
impairment losses.
The Uralita Group considers that all its intangible
assets have finite lives and amortises them
applying similar criteria to those used in the
depreciation of its property, plant and
equipment, considering estimated useful lives
between three and five years.
4.3. Property, plant and equipment
Goodwill is not amortized. Until 1 January 2004,
the IFRS transition date, goodwill was amortized
systematically on a straight-line basis.
Accordingly, goodwill on acquisitions before that
date are recognized at the amounts shown at the
transition. The Group tests goodwill for
impairment annually or whenever there are
indications that it may be impaired. An
impairment is recognized when the recoverable
amount is less than the carrying amount. The
loss is taken to the income statement.
Property, plant and equipment are stated at cost
less accumulated depreciation and any
accumulated impairment. In some cases, cost
includes past revaluations made in accordance
with various enabling legislation, including Royal
Decree-Law 7/1996 (see Note 11.4).
It also includes the values assigned in the
acquisition of companies. At 31 December 2006
and 2005, these amounted to €9,333 and
€9,530 thousand, respectively.
For the purpose of impairment testing, goodwill
is allocated to each of the Group’s cashgenerating
units or groups of cash-generating
units. A cash-generating unit’s recoverable
amount is the higher of value in use and
potential net selling price.
4.2. Intangible assets
LIntangible assets, which mainly relate to
software and trademarks, are initially recognized
The costs of expansion, modernisation or
improvements leading to increased productivity,
capacity or efficiency or to a lengthening of the
useful lives of the assets are capitalised as an
increase in the cost of the corresponding asset.
Repairs and maintenance expenses are
expensed currently.
Companies' own work on property, plant and
equipment is recorded at the accumulated cost
(external costs, in-house costs determined on
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