Page 41 - Bouvet årsrapport ENG 2010 ePub

Bouvet annual report 2010 41

projects are recognised in line the with the project’s degree of completion, when the outcome of the transaction can be reliably estimated. Progress is measured as accrued hours in relation to totally estimated hours. When the transaction’s result cannot be reliably estimated only revenue equaling accrued project costs are taken to income, provided that it is likely that the revenue will be greater than accrued project costs. Any estimated loss on a project will be fully recognised in the income statement in the period when it is identifed that the contract will result in a loss.

Segments

Te Group is not reporting internally on business areas or segments from an account-ing point of view. Te Group’s business is uniform and within the Norwegian market for IT consultancy services. Risks and earnings are followed up by departments in homogenous consultancy departments with the same markets, on a project basis and per consultant. Tis does not give grounds for segment reporting; hence management does not prepare such reports. Should there be changes in the Group’s activities, it will be considered whether the changes necessitate segment reporting.

Income tax

Te tax expense consists of tax payable and changes in deferred tax. Deferred tax/tax assets are calculated on all temporary difer-ences between book and tax value on assets and liabilities, with the exception of • temporary diferences related to not tax deductible goodwill

• temporary diferences related to in-vestments in subsidiaries, associated companies or joint ventures when the Group controls the time of reversal of the

temporary diferences and it is assumed that this will not happen in the foresee-able future.

Deferred tax assets are recognised when it is probable that the tax jurisdiction will make sufcient proft in future periods to utilise the tax asset. Te companies recognise previous not recorded deferred tax assets to the extent that it is probable that the Group can utilise the deferred tax asset. Likewise, the Group will reduce the deferred tax as-sets when it is considered unlikely that the deferred tax asset can be utilised.

Deferred tax and deferred tax assets are measured on the basis of the expected future tax rates of the Group companies where temporary diferences have arisen.

Deferred tax asset is disclosed at a nominal value and classifed as intangible asset in the balance sheet.

Tax payable and deferred tax assets are set-of directly against equity to the extent that the underlying items are booked against equity.

Research and development

Expenses relating to research are recognised in the income statement when incurred. Expenses related to development are bal-ance sheet recorded to the extent that the product or the process is technically and commercially viable, and the Group has adequate resources to complete the develop-ment. Expenses recorded in the balance sheet include materials, direct salary costs and a portion of directly attributable joint expenses. Development costs are recorded in the balance sheet at cost less accumulated depreciation and impairment losses. Bal-ance sheet recorded development costs are

depreciated on a straight-line basis and over the asset’s estimated useful life. Te Group has not recognised any development costs in the balance sheet at 31.12.2010.

Fixed assets

Fixed assets are valued at cost less accumulat-ed depreciation and impairment losses. When assets are sold or disposed of, the gross car-rying amount and depreciation are reversed, and any gain or loss on the sale or disposal is recognised in the income statement.

Te gross carrying amount of fxed assets is the purchase price, including duties/taxes and direct acquisition costs related to making the fxed asset ready for use. Subsequent costs, such as repair and maintenance costs, are normally expensed when incurred, whereas other expenses expected to increase future economic benefts are balance sheet recorded.

Depreciation is calculated using the straight-line method over the following periods.

Ofce equipment 5-10 years Ofce machines and vehicles 5 years IT equipment 3 years

Te depreciation periods and methods are assessed each year. Te residual value is estimated every year-end and changes in the estimate for residual value is accounted for as an estimation change.

Leasing

Financial leases

Leasing agreements where the Group accepts the most signifcant part of the risk and return connected with the ownership of the asset are fnancial leases. At the begin-ning of the leasing period, fnance leases are accounted for at an amount equivalent to the