Annual Report 2010/11 - Sonova

102
SeGMeNT RePoRTING
operating segments are defined on the same basis as information
is provided to the chief operating decision maker.
For the Sonova Group, the Chief executive officer (Ceo) is
the chief operating decision maker, who is responsible
for allocating resources and assessing the performance
of operating segments. Additional general information
regarding the factors used to identify the entity’s reportable
segments are disclosed in Note 5.
IMPAIRMeNT oF NoN-FINANCIAL ASSeTS
The Group assesses at each reporting date whether there
is any indication that an asset may be impaired. If any such
indication exists, the recoverable amount of the asset is
estimated. The recoverable amount of an asset or, where it
is not possible to estimate the recoverable amount of an
individual asset, a cash­generating unit is the higher of its
fair value less selling costs and its value in use. value in
use is the present value of the future cash flows expected to
be derived from an asset or cash­ generating unit. If the
recoverable amount is lower than the carrying amount, an
impairment loss is recognized. Impairment of financial
assets is described in Note 3.4, Financial assets. For the
purpose of impairment testing, goodwill as well as corporate
assets are allocated to cash generating units. An
annual impairment test is performed in the first half of
each financial year, even if there is no indication of impairment
(see section “business combinations and goodwill”).
ReLATed PARTIeS
A party is related to an entity if the party directly or indirectly
controls, is controlled by, or is under common control
with the entity, has an interest in the entity that gives it
significant influence over the entity, has joint control over
the entity or is an associate or a joint venture of the entity.
In ad dition, members of the Board of directors and the
Management Board or close members of their families are
also considered related parties as are post­employment
benefit plans for the benefit of employees of the entity. No
related party exercises control over the Group.
eMPLoyee BeNeFITS (IAS 19)
Pension obligations
Most employees are covered by post­employment plans
sponsored by corresponding Group companies in the
Sonova Group. Such plans are mainly defined contribution
plans (future benefits are determined by reference to the
amount of contributions paid) and are generally administered
by autonomous pension funds or independent insurance
companies. These pension plans are financed through
employer and employee contributions. The Group’s contributions
to defined contribution plans are charged to the
income statement in the year to which they relate.
Sonova Group also has a number of defined benefit pension
plans, both funded and unfunded. Ac counting and reporting
of these plans are based on annual actuarial valuations.
defined benefit ob ligations and service costs are assessed
using the projected unit credit method: the cost of providing
pensions is charged to the income statement so as to
spread the regular cost over the service lives of employees
participating in these plans. The pension obligation is
measured as the present value of the estimated future
outflows using interest rates of government securities
which have terms to ma turity approxi mating the terms of
the related liability. expenses from defined benefit plans
are charged to the appropriate income statement heading
within the operating results.
Actuarial gains and losses, resulting from changes in actuarial
assumptions and differences between assumptions
and actual experiences, are recognized in the period in which
they occur in the statement of comprehensive income in
equity.
other long­term benefits
other long­term benefits mainly comprise length of service
compensation benefits which certain Group companies are
required to provide in accordance with legal requirements
in the respective countries. These benefits are accrued and
the corresponding liabilities are included under “other
provisions.”
equity compensation benefits
The Board of directors of Sonova Holding AG, the Management
Board, and certain management and senior employees
of other Group companies participate in equity compensation
plans. The fair value of all equity compensation awards
granted to employees is estimated, using an option pricing
model, at the grant date and recorded as an expense over
the vesting period. The expense is charged to the appropriate
income statement heading within the operating result
and an equivalent increase in equity is recorded.