Matth. Hohner AG

Notes to the Consolidated Financial Statements for Business Year 2010/2011
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset form part of the cost of that asset and, therefore, should be capitalized. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
Cash and cash equivalents
Cash and cash equivalents include cash, bank balances, and short-term investments with original terms to
maturity of less than three months. For cash flow statement purposes, this item contains the cash funds and
short-term investments defined above as they are available and can be turned into cash at short notice.
Non-current assets held for sale
Non-current assets or disposal groups are classified as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. For this to be the case the sale
of the asset or disposal group must be highly probable (more than 50 %) and the asset or disposal group
must be available for sale in its present condition. For the sale to be highly probable the appropriate level of
management must be committed to a plan to sell the asset. In addition, the sale should be expected to qualify
for recognition as a completed sale within one year from the date of classification.
A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying
amount and fair value less costs to sell. A non-current asset is not depreciated (or amortized) as long as it is
classified as held for sale, but only impairment losses are recognized.
Financial instruments and hedges
Financial instruments as defined by IAS 39 are broken down into financial assets at fair value through profit or
loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets. Financial assets
are carried at their fair values when recognized for the first time. In the case of financial investments which
are not measured at fair value through profit or loss, any transaction costs that are directly attributable to the
acquisition of the financial asset are also included.
A retirement is only conducted, if the contractual right of an asset is running out or the asset value will be
assigned.
Financial liabilities ordinary constitute a claim on return in currency or another financial asset. The retirement
of a financial liability will be only executed, if it is repaid, i.e. the obligation mentioned in the contact are
fulfilled or repealed or run out.
Regular way purchases and sales of financial assets are recognized as of the trading date, i.e., the date on
which the Group entered into the obligation to purchase or sell the asset. A regular way purchase or sale is a
purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time
frame established generally by regulation or convention in the market place concerned
The Group decides on the classification of its financial assets upon initial recognition and reviews allocation at
the end of each business year if permissible and appropriate.
For purposes of the IFRS 7’s instructions, financial assets will contain in the following categories:
Financial Assets Available for Sale (AfS): Financial assets available for sale are mainly financial investments,
thus shares in non-consolidated subsidiaries and investments. These financial assets are carried at fair value,
derived from a stock-market price or a fair-market value, in case a realistic appraisal can be derived in an active
market. Unrealized gains or losses are resulting in neither profit nor loss in an “available-for-sale-reserve” in
equity. In the case of the disposal of financial instruments, any accumulated gains or losses from subsequent
measurement, recorded in equity, are recognized at fair value in profit or loss. Since a fair value could
neither be derived from comparable transactions in the reporting period, the financial assets were carried
at amortized cost as best estimate for their fair value. In case of objective information, stating a permanent
impairment of a financial asset, the impairment is recognized directly in profit or loss.
Notes to the CoNsolidated FiNaNCial statemeNts Notes to the CoNsolidated FiNaNCial statemeNts
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