Experian 2008 Annual Report Download - page 76

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74 Experian Annual Report 2008
2. Basis of preparation and significant accounting policies (continued)
Property, plant and equipment
Property, plant and equipment is held at cost less accumulated depreciation and any impairment in value.
Land is not depreciated.
Equipment on hire or lease is depreciated over the lower of the useful life and period of the lease.
Depreciation is provided on other property, plant and equipment at rates calculated to depreciate the cost, less estimated
residual value based on prices prevailing at the balance sheet date, of each asset evenly over its expected useful life as follows:
Freehold properties are depreciated over 50 years;
l
Leasehold premises with lease terms of 50 years or less are depreciated over the remaining period of the lease; and l
Plant, vehicles and equipment are depreciated over two to ten years according to the estimated life of the asset. l
Financial assets
The Group classifies its financial assets in four categories: loans and receivables, derivatives used for hedging, assets at
fair value through the profit and loss account and available for sale. The classification is determined at initial recognition and
depends on the purpose for which the financial assets are acquired.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities more than 12 months after the balance sheet date
which are classified as non-current assets. The Group’s loans and receivables comprise trade and other receivables and cash
and cash equivalents.
Available for sale financial assets
Available for sale financial assets are non-derivative financial assets that are either designated to this category or not
classified in the other financial asset categories.
Available for sale financial assets are carried at fair value and are included in non-current assets unless management
intends to dispose of the assets within 12 months of the balance sheet date. Purchases and disposals of such assets are
accounted for at settlement date. Unrealised gains and losses on available for sale financial assets are recognised directly in
equity. On disposal or impairment of such assets, the gains and losses in equity are recycled through the income statement.
Gains and losses recognised on disposal exclude dividend and interest income.
At each balance sheet date, the Group assesses whether there is objective evidence to suggest that available for sale
financial assets are impaired. In the case of equity securities, a significant or prolonged decline in the fair value of the
security below its cost is considered in determining whether the security is impaired. If any such evidence exists, the
cumulative loss is removed from equity and recognised in the Group income statement. Impairment losses recognised in the
Group income statement on equity instruments are not subsequently reversed through the Group income statement.
Trade receivables
Trade receivables are initially recognised at fair value (original invoice amount) and subsequently measured at this value less
any provision for impairment. Where the time value of money is material, receivables are carried at amortised cost.
A provision for impairment of trade receivables is established when there is objective evidence that the Group will not
be able to collect all amounts due according to the original terms of receivables. Such evidence is based primarily on the
pattern of cash received compared to the terms upon which the trade receivable is contracted. The amount of the provision is
the difference between the carrying amount and the value of estimated future cash flows. Any charge or credit in respect of
such provisions is recognised in the Group income statement within administrative expenses. The cost of any irrecoverable
trade receivables is recognised in the Group income statement immediately within administrative expenses. Subsequent
recoveries of amounts previously written off are credited in the Group income statement within administrative expenses.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, term and call deposits held with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current
liabilities on the Group balance sheet. For the purposes of the Group cash flow statement, cash and cash equivalents are as
defined above, net of bank overdrafts.
Notes to the Group financial statements continued