NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 73

NWG // FINANCIAL INFORMATION //
THE GROUP
Group´s consolidated income statement in the period
in which the asset is removed from the balance sheet.
The assets’ residual values, useful lives and methods of
depreciation are reviewed at the end of each financial
year and adjusted prospectively, if required.
Expenditures on maintenance and repairs are
expensed as incurred, but expenditures on significant
improvements are added to the cost and depreciated
over the remaining useful life of the underlying asset.
The following yearly depreciations in % are applied in
New Wave Group:
Buildings
Equipment, tools and installations
2-4 %
10-33 %
Impairment of tangible and
intangible fixed assets
If there are internal or external indications of a
decline in the value of an asset, the asset is to be
tested for impairment. For assets with indefinite
useful lives, goodwill and trademarks, such tests are
performed at least once a year, whether there are any
indications of impairment or not. An asset or group
of assets, known as a cash-generating unit, should be
written down if the recoverable amount is lower than
the carrying amount.
The recoverable amount is the higher of value in use
and net realizable value. Impairment losses are recog-
nized in the Group’s consolidated income statement in
the period during which they occur. If an individual
asset cannot be tested separately, as it is not possible
to identify the fair value less selling expenses for the
asset, the asset is allocated to a group of assets, known
as a cash-generating unit, for which it is possible to
identify separate future cash flows. To the extent that
the underlying factors behind an impairment loss
change in coming periods, the impairment loss will
be reversed. Impairment of goodwill is never reversed.
Information on the specific assumptions which need to
be made to calculate value in use of an asset is provided
in note 8.
Provisions
Provisions are recognized in the Group´s consolidated
balance sheet when there is a legal or informal obli-
gation arising from events that have occurred and it is
probable that payments will be required to settle the
obligation. It must also be possible to reliably estimate
the amount to be paid. The provision is valued at the
present value of the anticipated future expenditure to
settle the obligation.
Financial instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial
instrument recognized in the Group´s consolidated
balance sheet includes accounts receivable, other
receivables, derivatives, liquid assets, long-term and
short-term interest-bearing liabilities, accounts
payable, accrued expenses and other liabilities. All
financial assets are initially measured at fair value
except accounts receivable that are measured at tran-
saction price. Transactions costs are included in the
asset’s fair value, except in cases in which the change in
value is recognized in the Group´s consolidated income
statement. Financial liabilities are initially measured
at fair value reduced with transaction costs, except in
cases in which the change in value is recognized in the
Group´s consolidated income statement.
ANNUAL REPORT // 073