APC 2014 Annual Report Download - page 194

5CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Trademarks
Each component of an item of property, plant and equipment with
a useful life that differs from that of the item as a whole is
Trademarks acquired as part of a business combination are not depreciated separately on a straight-line basis. The main useful
amortized when they are considered to have an indefinite life. lives are as follows:
The criteria used to determine whether or not such trademarks
Buildings:
l20 to 40 years;
have indefinite lives and, as the case may be, their lifespan, are as
Machinery and equipment:
l3 to 10 years;
follows:
Other:
l3 to 12 years.
brand awareness;
l
outlook for the brand in light of the Group’s strategy for
l
The useful life of property, plant and equipment used in operating
integrating the trademark into its existing portfolio. activities, such as production lines, reflects the related products’
Non-amortized trademarks are tested for impairment at least estimated life cycles.
annually and whenever there is an indication they may be impaired.
Useful lives of items of property, plant and equipment are reviewed
When necessary, an impairment loss is recorded.
periodically and may be adjusted prospectively if appropriate.
Internally-generated intangible assets
The depreciable amount of an asset is determined after deducting
its residual value, when the residual value is material.
Research and development costs
Depreciation is expensed in the period or included in the
Research costs are expensed in the statement of income when production cost of inventory or the cost of internally-generated
incurred. intangible assets. It is recognized in the statement of income
Systems were set up to track and capitalize development costs under«Cost of sales»,«Research and development
in2004. As a result, only development costs for new products costs»or«Selling, general and administrative expenses», as the
launched since2004 are capitalized in the IFRSaccounts. case may be.
Development costs for new projects are capitalized if, and only if: Items of property, plant and equipment are tested for impairment
whenever there is an indication they may have been impaired.
the project is clearly identified and the related costs are
l
Impairment losses are charged to the statement of income
separately identified and reliably tracked; under«Other operating income and expenses».
the project’s technical feasibility has been demonstrated and the
l
Leases
Group has the intention and financial resources to complete the
project and to use or sell the resulting products;
The assets used under leases are recognized in the balance sheet,
the Group has allocated the necessary technical, financial and
l
offset by a financial debt, where the leases transfer substantially all
other resources to complete the development; the risks and rewards of ownership to the Group.
it is probable that the future economic benefits attributable to
l
Leases that do not transfer substantially all the risks and rewards
the project will flow to the Group. of ownership are classified as operating leases. The related
Development costs that do not meet these criteria are expensed in payments are recognized as an expense on a straight-line basis
the financial year in which they are incurred. over the lease term.
Capitalized development projects are amortized over the lifespan of
Borrowing costs
the underlying technology, which generally ranges from three to ten
years. The amortization of such capitalized projects is included in In accordance with IAS23R – Borrowing costs (applied as of
the cost of the related products and classified into«Cost of January1, 2009), borrowing costs that are directly attributable to
sales»when the products are sold. the acquisition, construction or production of a qualifying asset are
Software implementation
capitalized as part of the cost of the asset when it is probable that
they will result in future economic benefits to the entity and the
External and internal costs relating to the implementation of costs can be measured reliably. Other borrowing costs are
enterprise resource planning (ERP) applications are capitalized recognized as an expense for the period. Prior to January1, 2009,
when they relate to the programming, coding and testing phase. borrowing costs were systematically expensed when incurred.
They are amortized over the applications’ useful lives. In
accordance with paragraph98 of IAS38, the SAP bridge
application currently being rolled out within the Group is amortized
using the production unit method to reflect the pattern in which the
asset’s future economic benefits are expected to be consumed.
Said units of production correspond to the number of users of the
rolled-out solution divided by the number of target users at the end
of the roll-out.
1.10– Property, plant and equipment
Property, plant and equipment is primarily comprised of land,
buildings and production equipment and is carried at cost, less
accumulated depreciation and any accumulated impairment
losses, in accordance with the recommended treatment in
IAS16– Property, plant and equipment.
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