Other int an g ible assets IAS 36 and IAS 38 Other int an g ible assets are recogniz ed if it is probable that the e xpected future economic benefts that are at tribut able to the asset will fo w to the Group and that the cos t of the asset can be measured reliably Other int an g i ble assets include the tr ade mark Securit as which is re gar ded to ha v e an indefnite useful life The tr ademark has been capit aliz ed only in those cases where it has been acquired from a thir d part y This tr ademark is not amortiz ed but tes ted annually for impairment Other items in other int an g ible assets ha v e a defnite useful life These assets are recogniz ed at cos t and subsequently carried at cos t less accumu lated amortization and an y accumulated impairment losses Linear depreciation is used for all asset classes as follo ws Soft w are licenses 125333 percent Other int an g ible assets 67333 percent R ent al rig hts and similar rig hts are amortiz ed o v er the same period as the underlyin g contr actual period T an g ible noncurrent assets IAS 16 and IAS 36 T an g ible noncurrent assets are recogniz ed at cos t and subsequently carried at cos t less accumulated depreciation accor din g to plan and an y accumulated impairment losses Depreciation accor din g to plan is based on his torical cos t and the useful life of the asset Linear depreciation is used for all asset classes as follo ws M achiner y and equipment 1025 percent Buildin g s and land impro v ements 154 percent L and 0 percent Impairment IAS 36 Assets that ha v e an indefnite useful life are not subject to amortization and are tes ted annually for impairment Assets that are subject to depreciation or amortization are re view ed for impairment whene v er e v ents or chan g es in circums t ances indicate that the carr yin g amount ma y not be reco v er able An impairment loss is recogniz ed in the amount b y which the asset s carr yin g amount e x ceeds its reco v er able amount The reco v er able amount is the hig her of an asset s fair v alue less cos ts to sell and v alue in use v alue in use is measured as e xpected future discounted cash fo ws The calculation of v alue in use necessit ates that a number of assumptions and es timates are made The main assumptions concern the or ganic sales gro wth the de v elopment of the oper atin g mar g in and the necessar y oper atin g capit al emplo y ed requirement as w ell as the rele v ant W A C C W eig hted A v er a g e Cos t of Capit al r ate used to discount future cash fo ws F or the purposes of impairment tes tin g assets are grouped at the lo w es t le v els for which there are separ ately identifable cash fo ws C GU Pre viously recogniz ed impairment losses with the e x ception of impair ment losses related to g oodwill are re v er sed only if a chan g e has occurred re gar din g the assumptions that formed the basis for determinin g the reco v er able v alue when the impairment loss w as recogniz ed If this is the case a re v er sal of the impairment loss is carried out in or der to increase the book v alue of the impaired asset to its reco v er able v alue A re v er sal of a pre vious impairment loss is only recogniz ed to the e xtent that the new book v alue does not e x ceed what should ha v e been the book v alue after depreciation and amortization if the impairment loss had not been recogniz ed in the fr s t place Impairment losses related to g oodwill are ne v er re v er sed Leasin g contr acts IAS 17 When a leasin g contr act means that the Group as the lessee essentially receiv es the economic benefts and bear s the economic risk associated with the leased asset termed fnance leases the asset is recogniz ed as a non current asset in the consolidated balance sheet The net present v alue of the correspondin g obligation to pa y leasin g fees in the future is recogniz ed as a liabilit y In the consolidated s t atement of income leasin g pa yments are divided into depreciation and interes t The Group has no signifcant fnance leases where it is the lessor Oper ational leases where the Group is the lessee are recogniz ed as an oper atin g e xpense on a linear basis o v er the period of the lease in the consoli dated s t atement of income In cases where the Group is the lessor re v enue is recogniz ed as sales on a linear basis Depreciation is recogniz ed under oper atin g income Accounts receiv able Accounts receiv able are accounted for at nominal v alue net after pro visions for probable bad debt Probable and recogniz ed bad debt losses are included in the line production e xpenses in the s t atement of income Pa y ments receiv ed in adv ance are accounted under other current liabilities In v entories IAS 2 In v entories are v alued at the lo w er of cos t and net realizable v alue Cos t is determined accor din g to the fr s t in fr s t out principle The cos t of fnished g oods and w ork in progress comprises material direct labor and other direct cos ts Net realizable v alue is the es timated sellin g price in the or dinar y cour se of business less applicable v ariable sellin g e xpenses The necessar y deductions for obsolescence are made Financial ins truments IFRS 7 IAS 32 IAS 39 A fnancial ins trument is an y contr act that g iv es rise to a fnancial asset of one entit y and a fnancial liabilit y or equit y ins trument of another entit y The defnition of fnancial ins truments thus includes equit y ins truments of another entit y but also for e xample contr actual rig hts to receiv e cash such as accounts receiv able Financial ins truments are recor ded initially at fair v alue with the subse quent measurement dependin g on the designation of the ins trument The Group designates its fnancial ins truments in the follo win g cate g ories Financial assets or fnancial liabilities at fair v alue throug h proft or loss includin g deriv ativ es not designated as hed g in g ins truments Loans and receiv ables Heldtomaturit y in v es tments A v ailablefor sale fnancial assets f inancial liabilities designated as hed g ed item in a fair v alue hed g e Other fnancial liabilities Deriv ativ es designated for hed g in g The designation depends on the purpose for which the fnancial ins trument is acquired M ana g ement determines the designation of its fnancial ins tru ments at initial recognition and ree v aluates this designation at each report in g date M os t of the Group s current assets are loans and receiv ables includin g accounts receiv able and mos t other current receiv ables Financial assets or fnancial liabilities at fair v alue throug h proft or loss with e x ception for deriv ativ es heldtomaturit y in v es tments and a v ailablefor sale fnancial assets are normally cate g ories in which the Group has no or v er y limited positions f inancial liabilities designated as the hed g ed item in a fair v alue hed g e include both lon g term and short term loans designated as hed g ed items that are hed g ed efectiv ely via deriv ativ es designated for hed g e accountin g Other fnancial liabilities comprise all other fnancial liabilities includin g such items as accounts pa y able and other current liabilities and also an y lon g term and short term loans not included in the cate g or y fnancial liabilities designated for hed g in g 79 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012