ANNUAL REPORT Notes
foreign currency is recognised in the consolidated statement of comprehensive income if the requirements for hedge accounting of net investments in foreign operations are met .
NON-CURRENT ASSETS Non-current assets are measured at cost less accumulated depreciation and any impairment .
If there is an indication that an asset has declined in value , the recoverable amount of the asset is calculated . If the asset ’ s carrying amount exceeds the recoverable amount , the asset is immediately written down to its recoverable amount .
INTANGIBLE NON-CURRENT ASSETS Costs for software development Software development is conducted mainly within the framework of customer assignments .
Costs that are directly related to identifiable and unique software that is controlled by the Group are recognised as intangible noncurrent assets if there is a clearly defined development project with specific plans for how and when the asset is to be used in the operations , the cost can be calculated reliably , and the asset is expected to generate future financial benefits . In addition , it should also be technically possible to carry out the project , and the resources required to complete development must be available . Other development costs that do not meet these criteria are expensed as incurred . Development costs that were previously expensed are not recognised as an asset in subsequent periods .
The cost of the intangible asset includes direct costs for , for example , consultants and personnel developing proprietary software , and a reasonable share of relevant indirect costs . Scheduled amortisation is done on straight line over the estimated useful life , which is a maximum of five years for operational central software . Amortisation is recognised from the date on which the software is operational .
Goodwill and intangible assets with indefinite useful life Goodwill consists of the amount by which the cost for acquisition of companies or operations exceeds the fair value of the acquired identifiable net assets on the acquisition date . In the purchase price allocation , acquired intangible assets , such as customer relationships and trademarks , are recognised at market value before the remainder is attributed to goodwill .
Goodwill and other intangible assets with indefinite useful life , such as certain trademarks , are measured at cost less any impairment . Scheduled amortisation is not conducted ; instead , the need to recognise impairment is tested yearly or more often if there is an indication of a decline in value .
Other intangible assets Other intangible assets pertain mainly to customer agreements , acquired software and certain trademarks . These assets are recognised at cost less scheduled amortisation . Amortisation is done on a straight-line basis over the estimated useful life , which is normally between three and ten years . Ten-year amortisation schedules are applied for long-term agreements with companies with a strong market position and very long-term customer relationships .
PROPERTY , PLANT AND EQUIPMENT Property , plant and equipment are recognised at cost less depreciation . Costs for repairs and maintenance are expensed .
Property , plant and equipment are depreciated on straight-line basis over the estimated useful life of the assets . The asset ’ s residual value is taken into account when determining the depreciable amount of the asset . Equipment and installations are depreciation over a period of three to five years . Depreciation of buildings is done at 4 per cent per year .
FINANCE LEASES When a lease entails that the Group , in its capacity as lessee , essentially enjoys the economic benefits and bears the financial risks attributable to the leased asset , then the asset is recognised as a noncurrent asset on the consolidated balance sheet . A corresponding obligation to pay future leasing fees is recognised as a liability . Each lease payment is divided into amortisation of the liability and financial expenses to determine a fixed interest rate for the liability recognised in each respective period . The Group did not have any finance leases in 2014 or 2015 .
OPERATING LEASES Leases under which a significant portion of the risks and benefits associated with ownership are retained by the lessor are classified as operating leases . Leasing fees for operating leases are expensed in the income statement on a straight-line basis over the term of the lease .
FINANCIAL INSTRUMENTS Financial instruments include cash and cash equivalents , securities holdings , receivables , operating liabilities , liabilities under finance leases , borrowings and any derivative instruments . Purchases and sales of securities and derivative instruments are recognised on the trade date , meaning the date on which a binding purchase or sale contract was signed .
Securities intended to be held in the long term are attributed to the measurement categories of either available-for-sale financial assets , which are measured at fair value , or financial assets at fair value through profit or loss . Holdings of short-term investments are attributed to the measurement categories of either held-to-maturity investments , which are measured at amortised cost , or financial assets at fair value through profit or loss . The measurement category is determined separately for each holding of securities based on nature and the purpose of the holding .
For the financial assets at fair value through profit or loss category , changes in fair value are recognised as financial income and financial expenses , respectively , in profit or loss . However , changes in value regarding forward exchange contracts are recognised in operating profit ( see below ). For the financial liabilities at fair value through profit or loss category ( primarily provisions for estimated contingent consideration ), changes in value are recognised in operating profit . Changes in fair value for the availablefor-sale financial assets category are recognised in the consolidated statement of comprehensive income over the holding period , and accumulated changes in value in conjunction with sales are recognised as financial income and financial expenses , respectively , in profit or loss . For the latter category , if objective evidence exists to recognise impairment , such as a significant or prolonged decline in fair value , the impairment is recognised as a financial expense in profit or loss . The fair value of market-listed securities is based on the buying price on the balance sheet date .
Outstanding forward exchange contracts are measured at fair value . Forward exchange contracts pertain to hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction ( cash flow hedges ). Hedge accounting according to IAS 39 is applied for certain forward exchange contracts . This means that unrealised changes in value are recognised in the consolidated statement of comprehensive income until the hedged item is to be recognised in the consolidated income statement , at which point the profit or loss for the corresponding foreign exchange forward contract is recognised in the consolidated income statement . When the formal conditions for hedge accounting are not met , outstanding forward exchange contracts are measured as independent financial instruments on their respective balance sheet dates , for which both realised and unrealised changes in value are recognised in operating profit . As at 31 December 2015 there
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