Tiscali 2003 Annual Report Download - page 65

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6767
In the year in which an asset is purchased, the depreciation charge is reduced by 50 per cent. This accounting approach is dee-
med to provide a reasonable approximation of the time distribution of asset purchases over the year.
Assets obtained through financial leasing agreements and some of those obtained through comparable operating leasing agree-
ments are posted under the relevant line of tangible assets, and are depreciated using the straight-line method in the same man-
ner as tangible assets owned by the Group, based on their estimated residual life. Short- and medium-term payables to the lea-
sing organisation are booked as offsetting entries under the appropriate tangible asset item. Leasing payments are written off
against the cost of using third-party assets, and interest charges for the financial year are booked under financial charges. This
ensures that financial leasing operations are represented in accordance with the methodology established under IAS 17.
h) Long-term investments
Investments in non-consolidated subsidiaries and affiliated companies
Non-current assets consisting of investments in non-consolidated subsidiaries and affiliated companies are valued at equity, i.e.
booked in proportion to the Group’s portion of the shareholders’ equity of the Company as shown on its accounts for the previous
year, after application of adjustments required under the regulations pertaining to consolidated accounting statements.
Capital gains or losses resulting from application of the equity method are booked on the profit and loss account under write-ups
and write-downs respectively, under “adjustments to the value of financial assets”.
Investments in other companies and long-term securities
Other stakes held in companies and long-term financial investments are valued at cost. In the event of a permanent loss of value,
including a drop in the market price for listed securities, the value of shareholdings and securities is written down accordingly.
Should the reasons for the loss of value cease to apply, the previous value is restored in the accounts for the year.
Long-term investments in the form of loans are valued at their estimated realisable value.
i) Inventories
Inventories are valued at the lower of the purchase cost and estimated market value. Inventories of obsolete or slow turnover goods
are written down according to their use and/or sale potential.
j) Receivables
Receivables are booked at their estimated realisable value. This value is obtained by direct write-down of the receivables, perfor-
med on a case-by-case basis for large items and on a lump-sum basis for other items.
k) Investments other than non-current assets
Investments other than non-current assets are valued at the lower of their purchase cost and market value (based on prevailing
stock market prices).
l) Accruals and deferrals
Accruals and deferrals include only the proportion of earnings and charges pertaining to the financial year that will be booked in
subsequent financial years, and the proportion of revenues and expenses booked or incurred before the end of the financial year
but pertaining to the subsequent financial years. At no time shall this account include portions of revenues and expenses spread
over two or more financial years, the amount of which varies over time.