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ment with the entity and has the ability to affect
those returns through its power over the entity.
The financial statements of subsidiaries are in-
cluded in the consolidated financial statements
from the date on which control commences until
the date on which control is lost. Acquisitions
are accounted for using the acquisition method.
Intercompany transactions are eliminated.
If Autoneum does not have control over
entities but significant influence, which is
usually the case if Autoneum holds interests
of between 20% and 50%, these invest-
ments are classified as associated companies
and accounted for using the equity method.
Interests of less than 20% where Autoneum
does not have significant influence are
classified as non-consolidated investments
and are accounted for at fair value. The
subsidiaries, associated companies and non-
consolidated investments are listed in
note 36 on page 111.
1.4 Foreign currency translation
Items included in the financial statements of
each Group company are measured using the
currency of the primary economic environment
in which the company operates (“functional
currency”). The consolidated financial statements
are prepared in Swiss francs, which is the
functional currency and the reporting currency
of Autoneum Holding Ltd.
Transactions in foreign currencies are trans-
lated into the functional currency by applying
the exchange rates prevailing on the date of the
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.
1.5 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:
Buildings
20–50 years
Machinery and plant equipment
5–15 years
Data processing equipment
4–8 years
Vehicles and furniture
3–10 years
Components of certain assets with different
useful lives are depreciated separately. 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.
1.6 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.
72
Autoneum
Financial Report 2016
Consolidated Financial Statements