4 - Refresco.de

amortized cost, using the effective interest method, less any
impairment losses.
Derivative financial instruments
The Group holds derivative financial instruments to hedge its
foreign currency and interest rate risk exposures. Derivatives
are recognized initially at fair value and attributable transaction
costs are recognized in profit or loss when incurred. Subsequent
to initial recognition, the derivatives are measured at fair
value. All changes in its fair value are recognized immediately in
profit or loss. Where the financial instruments are held to hedge
foreign currency purchases of raw materials and consumables,
the changes are included in raw materials and consumables
used. Where the instruments are held to hedge interest rate
risk exposure, the changes are included in finance income and
expense.
2.4 Share capital
Ordinary share capital
Ordinary share capital is classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognized as a deduction from equity, net of any tax
effects.
Preference share capital
Preference share capital is classified as equity if it is non-redeemable,
or redeemable only at the Company’s option, and any
dividends are discretionary. Dividends thereon are recognized
as distributions within equity upon approval by the General
Meeting of Shareholders.
2.5 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost
less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to
the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labor, any other costs
directly attributable to bringing the assets to a condition suit-
able for their intended use, and the costs of dismantling and
removing the items and restoring of the site on which they are
located. Borrowing costs that are directly attributable to the
acquisition or construction of a qualifying asset are recognized
in profit and loss when incurred.
When elements of an item of property, plant and equipment
have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the net proceeds of
disposal with the carrying amount and are recognized on a net
basis in other income in profit or loss.
Subsequent costs
The cost of replacing part of an item of property, plant and
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the Group and its cost can be
measured reliably, the carrying amount of the replaced part
is derecognized. The costs of the day-to-day maintenance of
property, plant and equipment are recognized in profit or loss
as incurred.
Depreciation
Depreciation is recognized in profit or loss on a straight-line
basis over the estimated useful lives of each element of an
item of property, plant and equipment. Land is not depreciated.
The estimated useful lives for the current and comparative
periods are as follows:
Buildings : 25 years
Machinery and equipment : 5-10 years
Other fixed assets : 3-10 years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date.
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