Nabaltec_E_GB2016

S T N E M E T A T S L A I C N A N I F D E T A D I L O S N O C 74 MAJOR ACCOUNTING POLICIES 4.6 BORROWING COSTS Borrowing costs directly associated with the acquisition, construction or production of quali- fied assets (i.e. assets which take a substantial period of time to get ready for use or sale) are included in the cost of the asset until such time as the asset is ready for its intended use or sale. See Section 6.2, “Property, plant and equipment.” Income earned from the temporary investment of specifically borrowed funds is subtracted from capitalizable borrowing costs until those funds are spent on qualified assets. All other borrowing costs are recognized with effect on profit and loss in the period in which they accrue. 4.7 GOVERNMENT GRANTS Government grants are deducted from the cost of the relevant asset (IAS 20.24). They are reversed over the useful life of the asset in the form of reduced depreciation. See Section 6.10, “Current and non-current accounts payable.” LEASES: THE GROUP AS LESSEE 4.8 The determination as to whether an agreement is or contains a lease is made based on the economic content of the agreement and requires an assessment as to whether performance of the contractual agreement is contingent upon the use of a specific asset or assets and whether the agreement grants a right to use the asset. Finance leases in which all risks and opportunities associated with ownership of the trans- ferred essentially pass to the Group at the start of the lease are recognized at the fair value of the leased object or the present value of minimum lease payments, whichever is lower. Lease payments are broken down into two components, the finance charge and amortization of the outstanding liability, so that the residual book value of the lease liability accrues inter- est at a constant rate. The finance charge is immediately recognized as an expense. If it is not adequately certain that ownership will pass to the Group once the term of the lease expires, capitalized lease objects are fully depreciated over the term of the lease or their use- ful life, whichever is shorter. No finance lease liabilities existed as of 31 December 2016 and 31 December 2015. Leases in which beneficial ownership cannot be attributed to the Group are classified as oper- ating leases. Operating lease expenses are recognized in the consolidated income statement in straight-line fashion over the term of the lease. Future expenses of this nature are reported in Section 7.1, under “Other Financial Liabilities.” In sale-and-lease-back transactions which establish an operating lease, the realization of income from the sale depends on the relationship of the sale price to fair value. If the sale price is equal to the fair value of the asset, the income is recognized immediately. In case of sale-and- lease-back transactions which result in a finance lease, the entire income is generally deferred and amortized over the term of the lease. IMPAIRMENT OF NON-FINANCIAL ASSETS 4.9 The capitalized book value of intangible assets with a limited useful life and property, plant and equipment is checked for impairment based on the expected future cash flows arising from use of the asset (discounted at a rate commensurate with the risk) and based on the net sale price of the asset (impairment test) if certain events or market developments indicate an |||| Nabaltec AG | Annual Report 2016

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