Saab 2013 Annual Report Download - page 77

Amortisation
Amortisation is recognised in prot or loss over the intangible xed assets’
estimated periods of use, provided such periods can be determined. Intangi-
ble xed assets, excluding goodwill and other intangible xed assets with
indeterminate periods of use, are amortised from the day they are available
for use. Estimated periods of use and amortisation methods are as follows:
 Patents, trademarks, customer relations and other technical rights:
- years on a straight line basis
 Capitalised development costs: Self-nanced capitalised development
costs are amortised based on estimated production volume, but over a
maximum period of  years. Production volume is set using future
sales projections according to a business plan based on identied
business opportunities. Acquired development costs are amortised on
a straight line basis over a maximum of  years.
 Goodwill: In the Parent Company, goodwill is amortised over a maxi-
mum  years. Goodwill is not amortised in the Group.
Periods of use are tested annually and unnished development work is tested
for impairment at least once a year regardless of any indications of dimin-
ished value.
Tangible fixed assets
Tangible xed assets are recognised as an asset in the statement of nancial
position if it is likely that the future economic benets will accrue to the
Group and the cost of the asset can be reliably estimated.
Tangible xed assets are recognised at cost aer deducting accumulated
depreciation and any impairment. Cost includes the purchase price and costs
directly attributable to putting the asset into place and condition to be uti-
lised in accordance with the purpose of the purchase. Examples of directly
attributable expenditures included in cost are delivery and handling, installa-
tion, title and consulting services.
e cost of xed assets produced by Saab includes expenditures for mate-
rial, expenditures for employee benets and, where applicable, other produc-
tion costs considered directly attributable to the xed asset.
e cost of tangible xed assets includes estimated costs for disassembly
and removal of the assets as well as restoration of the location or area where
these assets are found.
e carrying amount of a tangible xed asset is excluded from the state-
ment of nancial position when the asset is sold or disposed of or when no
future economic benets are expected from its use. e gain or loss that arises
on the sale or disposal is comprised of the dierence between the sales price
and the asset’s carrying amount less direct selling expenses. Such gains and
losses are recognised as other operating income/expenses.
Incremental expenditures
Incremental expenditures are added to cost only if it is likely that the future
economic benets tied to the incremental expenditures will accrue to the
Group and the expenditures can be reliably estimated. All other incremental
expenditures are recognised as costs in the period they arise.
e determining factor whether an incremental expenditure is added to
cost is whether it relates to the replacement of identiable components, or
parts thereof. If so, the cost is capitalised. Even in cases where a new com-
ponent is created, the expenditure is added to cost. Any undepreciated car-
rying amount of replaced components, or parts of components, is disposed
of and expensed in connection with the replacement. Repairs are expensed
as incurred.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construc-
tion or production of an asset and takes a substantial period of time to pre-
pare for its intended use or sale is capitalised as part of the asset’s cost when
it is likely that they will lead to future economic benets for the Group and
the expenditures can be measured reliably. Other borrowing costs are
expensed in the period in which they arise.
Depreciation
Depreciation is booked on a straight-line basis based on the asset’s cost less
estimated residual value at the end of the period of use, over the asset’s esti-
mated period of use. Land is not depreciated. Component depreciation is
applied, which means that xed assets consisting of various components or
where signicant parts have dierent periods of use are depreciated as sepa-
rate assets based on their periods of use.
Estimated periods of use:
 Operating properties: – years
 Plant and machinery: – years
 Equipment, tools, installations and computers: – years
 Aircra: – years
Each asset’s residual value and period of use are estimated annually. Periods
of use are unchanged compared with the previous year.
Lease assets
Lease assets mainly refer to  aircra owned by legal entities within Saab
Aircra Leasing and leased out via operating leases. Saab Aircra Leasing’s
eet consists of  Saab , of which  aircra are leased in through operat-
ing leases and leased out through operating leases.
Leasing is classied in the consolidated accounts as either nance or
operating leasing. Finance leasing exists when the economic risks and bene-
ts tied to ownership are essentially transferred to the lessee; otherwise it is
operating leasing.
For anticipated or established decits according to current leases with
respect to aircra nancing in Saab Aircra Leasing, provisions are allocated
at an amount corresponding to the obligation. See also Note .
Saab as lessor
At the end of the year, Saab only had operating leases. Leasing revenue is rec-
ognised on a straight-line basis over the leasing period. Direct expenditures
that arise by entering into an operating lease are expensed on a straight-line
basis over the leasing period.
Biological assets
Biological assets in the form of forests are carried at fair value aer deducting
estimated selling expenses. Fair value is based on the valuation of an inde-
pendent appraiser.
Investment properties
Investment properties are properties held to earn rental income, for capital
appreciation or a combination of both. Investment properties are carried in
the statement of nancial position at fair value. Fair value has been deter-
mined by calculating net rental income, which then serves as the basis of a
valuation of fair value.
Assets held for sale
When an asset is classied as held for sale, it means that its carrying amount
will be recovered primarily through a sale rather than through use. In order
to classify a xed asset as an asset held for sale, the asset must be available for
immediate sale and it has to be highly likely that a sale will take place.
Immediately before classication as held for sale, the recognised value of
the assets is determined according to the Group’s accounting principles.
Upon initial classication as held for sale, assets are recognised at the lower of
their carrying amount and fair value less selling expenses.
Assets are not depreciated/amortised aer they are classied as held for sale.
Impairment
e carrying amount of xed assets, with the exception of assets stated at fair
value, is tested on each closing day for any indication of impairment. If an
indication exists, the asset’s recoverable amount is calculated. A description of
impairment principles for available-for-sale nancial assets is provided below.
For goodwill and other intangible xed assets with an indeterminate
period of use and intangible xed assets not yet ready for use, recoverable val-
ues are calculated annually in the fourth quarter.
e recoverable amount of an asset is the higher of its fair value less sell-
ing expenses and value in use. Value in use is measured by discounting future
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2013 73