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transaction. Foreign exchange gains and losses
resulting from the settlement of such transactions
and from the translation at year-end exchange
rates of monetary assets and liabilities denomi
nated in foreign currencies are recognized in
the income statement.
For consolidation purposes, items in the
balance sheet of foreign subsidiaries are trans-
lated at year-end exchange rates, while income
statement items are translated at average rates
for the period. The resulting currency translation
differences are recognized in other compre
hensive income and, in the event of a disposal of
a foreign operation, transferred to the income
statement as part of the gain or loss from disposal.
Tangible assets
Tangible assets are stated at historical cost less
accumulated depreciation, which is recognized
on a straight-line basis over the estimated useful
life of the asset. Historical cost includes ex-
penditures that are directly attributable to the
acquisition of the assets. Useful life is deter-
mined according to the expected utilization of
each asset. The relevant ranges are as follows:
Factory buildings
20–50 years
Machinery and plant equipment
5–15 years
Tools/IT equipment/furniture
3–10 years
Vehicles
3–5 years
Components of certain assets with different
useful lives are depreciated separately. All gains
or losses arising from the disposal of tangible
assets are recognized in the income statement.
Costs of maintenance and repair are charged
to the income statement as incurred. The residual
values and useful lives of tangible assets are
reviewed, and adjusted if appropriate, at each
balance sheet date.
Leases
Leased assets where Autoneum substantially
bears all the risks and rewards of ownership
(finance leases) are capitalized. Assets held
under such finance leases are depreciated
over the shorter of their estimated useful life or
the lease term. The corresponding lease obli
gations, excluding finance charges, are included
in borrowings. Lease installments are divided
into an interest and a principal component.
All other leases are classified as operating
leases. Payments in respect of operating leases
are charged to the income statement on a straight-
line basis over the duration of the lease.
Intangible assets
Intangible assets such as product licenses,
patents and trademark rights as well as software
acquired from third parties are included in the
balance sheet at acquisition cost and are amor-
tized on a straight-line basis over a period of
up to eight years. The residual values and useful
lives of intangible assets are reviewed, and
adjusted if appropriate, at each balance sheet
date. Autoneum has neither in the current
reporting period nor in the prior period intangible
assets that have an indefinite useful life
recorded in the balance sheet. Autoneum has no
goodwill capitalized in the balance sheet.
Impairment of assets
Tangible assets and intangible assets are tested
for impairment if there are indications that,
due to changed circumstances, their carrying
value may no longer be fully recoverable. If such
a situation arises, the recoverable amount is
determined. This is the higher of its value in use
and its fair value less cost to sell. Value in use
is based on the estimated future cash flows, dis-
counted to their present value using a pre-tax
discount rate that reflects current market assess-
ments of the time value of money and the risks
specific to the asset. If the recoverable amount
is below the carrying amount, a corresponding
impairment loss is recognized in the income
statement. Where the recoverable amount cannot
be determined for an individual asset, it is
determined for the cash generating unit to which
the asset belongs. To determine the value of an
68
Autoneum
Financial Report 2015
Consolidated financial statements