Tiscali 2003 Annual Report Download - page 105

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107107
f) Tangible assets and depreciation
Non-current assets are recorded at purchase or production cost, including any additional charges.
Depreciation is calculated on the basis of cost using the straight-line method, depending on the estimated residual useful life of the asset.
Routine maintenance expenses are charged to the profit and loss account in full. Maintenance expenses of an incremental natu-
re are attributed to the asset to which they refer and depreciated over the estimated residual life of the asset.
A summary of depreciation rates follows. These remain unchanged with respect to the previous financial year:
Depreciation rates adopted for specific plant and machinery (IP network technologies and Ethernet, commercially know as routers
and L3/L2 switches), which constitutes the item most commonly booked under tangible assets, are confirmed by an independent
report prepared for the purposes of these accounts.
In the year in which an asset is purchased, the depreciation charge is reduced by 50 per cent. This accounting approach is adop-
ted to provide a reasonable approximation of the time distribution of asset purchases during the year.
Capital equipment leasing operations performed in the financial year under consideration are posted on the balance sheet based
on the interpretation of current legislation, i.e. leasing fees must be posted in the period to which each payment refers.
g) Investments
Investments in Group and affiliated companies
Investments in Group and affiliated companies that are classed as non-current financial assets are valued at cost, based on the
acquisition or subscription price. The cost is lowered when there is a permanent loss of value.
Long-term investments in the form of loans are valued at their estimated realisable value.
h) Inventories
Raw materials, work in progress and finished products
Inventories, mainly consisting of goods for resale, are valued at either their purchase cost calculated using the weighted average
method, or their estimated market value, whichever is the lower.
Contract work in progress is valued in line with the proportion of the work completed.
Plant and machinery
- general plant and machinery 20%
- minor plant and machinery 12%
- specific plant and machinery 20%
- other plant and machinery 20%
Industrial and commercial equipment
- network and other specific equipment 20%
- other industrial and commercial equipment 20%
- miscellaneous minor items 25%
Other assets
- office furniture 12%
- IT and electronic office equipment 20%
- vehicles 25%
- other assets 20%