TomTom 2005 Annual Report Download - page 66
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Please find page 66 of the 2005 TomTom annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Impairmentofassets
AteachbalancesheetdatetheCompanyreviewsthe
carryingamountsofitstangibleandintangibleassetsto
determinewhetherchangesincircumstancesindicate
thatthecarryingamountofanassetmaynotbe
recoverable.Ifsuchindicationexists,therecoverable
amountwillbeestimatedinordertodeterminethe
extentoftheimpairmentloss.
Therecoverableamountisthehigherofthefairvalue
lesscoststosellandvalueinuse.Thevalueinuse
equalsthenetpresentvalueofthefuturecashflow
generatedbytheasset,usingapre-taxdiscountratethat
reflectscurrentmarketassessmentsofthetimevalueof
moneyandtherisksspecifictotheasset.
Iftherecoverableamountislowerthanthecarrying
amount,areductiontothecarryingamountismade.
Suchanimpairmentlossisrecognisedasanexpense
immediately.
Whereanimpairmentlosssubsequentlyreverses,the
carryingamountoftheasset(cash-generatingunit)is
increasedtotherevisedestimateofitsrecoverable
amount,sothattheincreasedcarryingamountdoesnot
exceedthecarryingamountthatwouldhavebeen
determinedhadnoimpairmentlossbeenrecognisedfor
theasset(cash-generatingunit)inprioryears.Areversal
ofanimpairmentlossisrecognisedimmediatelyinthe
profitandloss,unlesstherelevantassetiscarriedata
revaluedamount,inwhichcasethereversalofthe
impairmentlossistreatedasarevaluationincrease.
Inventories
Inventoriesarestatedatthelowerofcostandnet
realisablevalue.Thecostofinventoriescomprisesall
costsofpurchaseandassemblyandconversionto
finishedproducts.Itexcludesborrowingcosts.Thecost
ofinventoriesisrecordedusingthefirst-infirst-outcost
basis,netofreservesforobsolescenceandanyexcess
stock.Netrealisablevaluerepresentstheestimated
sellingpricelessanestimateofthecostsofcompletion
anddirectsalescosts.
Tradereceivables
Tradereceivablesarestatedatnominalvalue.
Appropriateallowancesforestimatedunrecoverable
amountsarerecognisedintheprofitandlossaccount
whenthereisevidencethattheCompanywillnotbe
abletocollectallamountsdueaccordingtotheoriginal
termsofthereceivables.
Cashandcashequivalents
Cashandcashequivalentscomprisecashonhand,
depositsheldoncallwithbanks,andothershort-term
highlyliquidinvestmentsthatarereadilyconvertibletoa
knownamountofcashandaresubjecttoaninsignificant
riskofchangesinvalue.
Financialliabilitiesandequity
Financialliabilitiesandequityinstrumentsissuedbythe
Groupareclassifiedaccordingtothesubstanceofthe
contractualarrangementsenteredintoandthedefinitions
ofafinancialliabilityandanequityinstrument.Anequity
instrumentisanycontractthatevidencesaresidual
interestintheassetsoftheGroupafterdeductingallof
itsliabilities.
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