Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
75
The forecasts are based on reasonableness and consistency relating to future general expenses,
expected capital investments, financial conditions, as well as macro-economic assumptions, with
particular reference to increases in product prices, which take into account expected inflation rates.
The results of the “impairment tests” did not generate in the previous year permanent losses in value.
In the event of a
write-down for impairment, the value of goodwill may not be restated.
Reference should be made to Note 1 of the separate and consolidated financial statements of the
Group for further information on the indicators utilised for the impairment analysis at December 31,
2016.
Intangible assets with definite useful lives
Intangible assets with definite useful lives are amortised on a straight line basis over their useful life
to take account of the residual possibility of utilisation. Amortisation commences when the asset is
available for use.
The amortisation policies adopted by the Group provide for:
Trademarks: based
on the useful life
Concessions, Licences and Patents: based on the duration relating to the right under
concession or license and based on the duration of the patent;
Other intangible assets: 3 years.
Research
and development costs
Research and development costs are recorded in the income statement in the year incurred, with the
exception of development costs recorded under “Intangible assets”, when they satisfy the following
conditions:
the project is clearly identified and the related costs are reliably identifiable and measurable;
the technical feasibility of the
project is demonstrated;
the intention to complete the project and sell the assets generated from the project are
demonstrated;
a potential market exists or, in the case of internal use, the use of the intangible asset is
demonstrated for the production of the intangible assets generated by the project;
the technical and financial resources necessary for the completion of the project are available;
the intangible asset will generate probable future economic benefits.
Amortisation of development costs recorded under intangible assets begins from the date in which the
result generated from the project is commercialised. Amortisation is calculated, on a straight-line
basis, over the useful life of the project.
Consolidated Financial Statements of the F.I.L.A. Group
Separate Financial Statements of F.I.L.A. S.p.A.
76
Property, plant and equipment
Property, plant and equipment are measured at purchase cost, net of accumulated depreciation and any
loss in value. The cost includes all charges directly incurred for the purchase and/or production. The
interest charge on loans for the purchase and the construction of tangible fixed assets, which would
not have been incurred
if the investment was not made, are not capitalised but expensed to the income
statement based on the accruals of the costs. Where an asset relating to property, plant and equipment
is composed of various components with differing useful lives, these components are recorded
separately (significant components) and depreciated separately. Property, plant and equipment
acquired through business combinations are recognised in the financial statements at fair value at the
acquisition date.
The expense incurred for maintenance and repairs are directly charged to the income statement in the
year in which they are incurred. The costs for improvements, modernisation and transformation of an
incremental nature of tangible fixed assets are allocated as an asset.
The purchase price or construction cost is net of public grants which are recognised when the
conditions for their concession are confirmed. At the date of the present financial statements there are
no public grants recorded as a reduction within “Property, Plant and Equipment”.
The initial value of property, plant and equipment is adjusted for depreciation on a systematic basis,
calculated on a straight-line basis monthly, when the asset is available and ready for use, based on the
estimated useful life.
The estimated useful lives for the current and previous years are as follows:
Buildings
25 years
Plant and
machinery
8.7 years
Equipment
2.5 years
Other intangible assets:
Office equipment:
8.3 years
Furniture and EDP:
5 years
Transport vehicles:
5years
Motor vehicles:
4 years
Other:
4 years
Finance leases
The assets held through finance lease contracts, where the majority of the risks and rewards related to
the ownership of an asset have been transferred to the F.I.L.A. Group, are recognised as assets at their
fair value or, if lower, at the present value of the minimum lease payments, including any redemption
amounts to be paid. The corresponding liability due to the lessor is recorded under “Financial