Group - L. Possehl & Co. mbH

aCCoUNtiNG PriNCiPLES
intangible assets acquired for valuable consideration are carried
at cost less scheduled amortization on a straight-line basis and any
unscheduled amortization as necessary. Scheduled amortization
normally takes place over the contractual or expected useful life of the
individual assets. Licenses and similar rights are normally amortized
over a useful life of one to five years.
Goodwill resulting from initial consolidation is recognized directly
in equity in the Group’s retained earnings. All other goodwill is
amortized over the expected amortization period of up to 15 years.
Property, plant, and equipment are carried at cost, less
scheduled depreciation for use and any unscheduled depreciation as
necessary. If the basis for unscheduled depreciation no longer exists,
the assets are written back. Costs of property, plant, and equipment
produced internally include an appropriate portion of overhead costs,
including depreciation of production equipment, as well as the direct
costs. Costs of debt financing are not included in production costs.
Assets of minor value are fully depreciated in the year purchased and
shown in the asset schedule under disposals.
Public subsidies for the purchase or manufacture of assets are
deducted from the cost of those assets.
Property, plant, and equipment are normally depreciated over their
expected useful life on a straight-line basis. In the Electronics division,
tools are depreciated based on a combination of useful life and actual
use over a maximum period of four years.
Scheduled depreciation is based on the following assumptions of
useful life:
40
years
Buildings 20 – 50
Technical plant and machinery 5 – 10
Tools 1 – 4
Operating and office equipment 3 – 10
Carrying amounts for associated companies reported under financial
assets are adjusted for the pro rata share of profit and loss, taking
account of dividend payments. These adjustments are disclosed in the
asset schedule as additions or disposals. Equity investments in subsidiaries
that are not fully consolidated and other equity investments
are recognized at cost less any impairment losses. Loans bearing no or
a low rate of interest are recognized at present value. Interest bearing
loans are always recognized at nominal value. Securities held as fixed
assets are recognized at cost.
inventories are carried at the lower of cost or quoted/market
price or fair value on the balance sheet date. Production-related overhead
costs and depreciation of production-related property, plant, and
machinery are included in addition to direct costs of production.
Financing costs are not included. Inventories are measured using the
average cost method, except for precious metals, which are measured
using the Last-in-First-out method, in line with common practice in
the industry. Inventories are written down if their realizable value is
diminished due to longer storage periods. The principle of “lower of
cost or market” is respected.
advanced payments received for inventories are deducted
directly from the carrying amounts.
receivables and other assets are normally recognized at the
lower of nominal value or fair value as per the balance sheet date. Any
risks are accounted for by individual write downs of 1 % of the carrying
amount of receivables not written down individually.
tax receivables and tax liabilities are normally recognized at the
amount expected to be received or paid to the tax authorities.
For the first time, pension provisions are measured according
to the projected benefit credit method in line with IAS 19 taking into
account future compensation and pension adjustments. The calculation
is based on the following parameters:
Actuarial interest rate 5.3 %
Salary growth 3.0 %
Pension growth 1.5 %