Page 70 - Bouvet årsrapport ENG 2010 ePub

Bouvet annual report 2010 70

Balance sheet recorded intangible assets are carried at cost less any accumulated amorti-sation and impairment losses.

Te cost of intangible assets includes the purchase price and any duties/taxes and expenses directly related to the acquisition of the asset.

Internally generated intangible assets, with the exception of capitalised development costs, are not capitalised, and expenditure is charged to proft and loss in the year in which the expenditure is incurred.

Te useful lives are assessed to be either fnite or indefnite. Intangible assets with fnite lives are amortised over the useful economic life and assessed for impair-ment whenever there is an indication that the intangible asset may be impaired. Te amortisation period and method are assessed at least once a year. Changes in amortisation method and/or period are treated as a change in estimate.

Intangible assets with indefnite useful lives are tested for impairment annually, either individually or at the cash generating level. Such intangible assets are not amortised. Te useful life is reviewed annually to determine whether the indefnite life assess-ment continues to be supportable. If not, the change to fnite useful lifetime is made prospectively.

Financial instruments

In accordance with IAS 39 Financial Instruments: Recognition and Measure-ment, fnancial instruments are classifed within the scope of IAS 39 in the following categories: at fair value with changes in value through proft or loss, held to maturity, loans and receivables, available for sale and other liabilities.

Te company has fnancial instruments in the form of trade accounts receivable and payable, recognised at amortised cost.

Trade accounts receivables are initially recog-nised at fair value plus any transaction costs.

Trade accounts receivables are subsequently carried at amortised cost using the efective interest method, if the amortisation efect is material. Te carrying amount is subsequent-ly reduced by any impairment losses. Provi-sions for impairment are made when there are objective indicators that the company will not receive their contractual payments.

Te fair value of fnancial assets is classifed as “available for sale” and “held for trading purposes” is decided with a reference to the stock exchange rate at the balance sheet date. For non-listed fnancial assets, fr value is estimated by applying valuation tech-niques, based on assumptions not substanti-ated by observable market prices.

Te carrying amount of trade accounts re-ceivable and payable is approximately equal to fair value, as they are agreed at “normal” conditions and normally have a short period to maturity.

Cash and cash equivalents

Cash includes cash in hand and bank deposits. Cash equivalents are short-term liquid investments that can be converted to cash within three months and at a known amount.

Equity

Liabilities and equity Financial instruments are classifed as liabilities or equity in accordance with the underlying fnancial reality.

Interest, dividend, proft and loss related to a fnancial instrument classifed as debt will be presented as expense or income. Distri-butions to owners of fnancial instruments classifed as equity will be set of directly against equity. When rights and obliga-tions connected to how distributions from fnancial instruments will be carried out depend on certain types of uncertain future events and are outside both the issuer’s and owner’s control, the fnancial instrument will be classifed as debt if it, at the time of issue, is improbable that the issuer will have to pay cash or other fnancial assets. In that case, the fnancial instrument is classifed as equity.

Own shares

On repurchase of own shares, costs including directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement.

Costs of equity transactions Transaction costs directly relating to an equity transaction are set of directly against equity after deducting tax expenses.

Employee benefits

Defined contribution plan Te company has a defned contribution plan by which it is committed to contribute to each employee’s pension plan with a fxed amount. Te future pension depends on the size of the contributions and the yield on the pension savings. Te company’s obligation is fully met when paid. Te pen-sion costs are charged as an expense when accrued.

Defined benefit plan

Te company has a closed defned beneft plan for a limited number of employees. According to the scheme, the employees are entitled to future agreed pension contribu-tions, where the contributions are based on the number of years of earning and the sal-ary level at the time of retirement. Pension costs, pension obligations and pension funds are calculated on straight-line earnings based on future assumptions on discount interest rate, future salary regulations, pensions and yields from national insurance, future yields on pension funds and actuarial assumptions on mortality, natural attrition etc. Net pen-sion obligations are disclosed as long-term debt in the balance sheet. Changes in the liability and the pension funds due to changes in and deviations from the assump-tions for calculation (estimation changes) are distributed over the average remain-ing earning time if the deviation at the beginning of the year exceeds 10% of gross pension commitments or pension funds (corridor), whichever the larger.