Access America 2004 Annual Report Download - page 27

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periodic rate of interest on the remaining balance of the
liability for each period.
A finance lease gives rise to depreciation expense for the asset
as well as a finance expense for each accounting period. The
depreciation policy for leased assets is consistent with that for
other depreciable assets.
Investments
Investments include securities available for sale, participations,
mortgages and loans.
Securities available for sale are accounted for at fair value.
Positive and negative differences between market value and
cost or amortised cost are included in a separate component
of shareholders’ equity, net of deferred tax. Realised gains
and losses are principally determined by applying the average
cost method.
Accounts receivable
The accounts receivable are carried at nominal value less any
necessary value adjustment.
Deferred acquisition costs
Deferred acquisition costs, which are incurred in connection
with the acquisition or renewal of insurance policies, are
capitalised and amortised through the income statement over
the term of the policies.
Cash and cash equivalents
This item includes balances with banks payable on demand,
cash on hand and bank deposits with a maturity of three
months or less at the date of purchase.
The carrying amount of cash with banks and cash on hand
corresponds to the fair value. Cash funds are stated at their
face value, with holdings of foreign notes and coins valued at
year-end closing.
Deferred tax assets
The calculation of deferred tax is based on temporary
differences between the carrying amounts of assets or liabilities
in the published balance sheet and their tax basis, and on
differences arising from the application of uniform valuation
policies for consolidation purposes. The tax rates used for the
calculation of deferred taxes are the local rates applicable in
the countries concerned. Anticipated changes are already
taken into account as at balance sheet date.
Supplementary information on assets
Impairment of assets
All assets are reviewed regularly to ensure that no further
value adjustments are required. Valuation write-downs are
charged to the income statement if any permanent diminution
in value is identified. Write-downs are based on the relevant
estimated recoverable amounts.
Accounting for operating leases
Accounting for equipment and vehicles under operating
leases, whereby the risks and benefits relating to ownership of
the assets remain with the lessor, are not recorded in the
balance sheet and all related expenses are accounted for in
the income statement in the period they arise.