66 / 116
end of the lease term. The Group has no leases under
which lease payments are owed depending on future
events.
Subsequent expenditure
The cost price of replacing part of a property, plant and
equipment is included in the carrying amount of the asset
whenever it is probable that the future economic benefits
relating to the assets will flow to the Group and the cost
price of the assets can be measured reliably. The cost of
daily maintenance of property, plant and equipment is
expensed in the income statement as and when incurred.
Depreciation
Depreciation is charged to the income statement using the
straight-line method over the expected useful life of the
asset, or of the separately recorded major components of
an asset. It begins when the asset is ready for use. The
residual value, useful lives and depreciation methods are
reviewed annually. Land is not depreciated.
The estimated useful lives are:
★
★
Buildings: 30 years
★
★
Fixtures: 5 – 15 years
★
★
Computers: 3 years
★
★
Plant, machinery and equipment: 5 – 10 years
★
★
Furniture and vehicles: 3 – 10 years
INVESTMENT PROPERTY
Investment property is property that is held in order to
earn rental income or for capital appreciation or both, but
is not intended for sale in the context of usual business
operations, for use in the production, for delivery of goods
or for administrative purposes.
Investment property is measured at cost, less cumulative
depreciation and impairments. The accounting policies for
property, plant and equipment apply.
Rental income from investment property is accounted for
as described below in the accounting policy for revenue.
INTANGIBLE ASSETS
Goodwill
Up to and including 2009 goodwill was determined as the
difference between the purchase price and the Group’s
share in the fair value of the acquired identifiable net
assets.
The following accounting policy applies as from 2010.
Goodwill from an acquisition is the positive difference
between the fair value of the consideration transferred
plus the carrying amount of any non-controlling interest in
the enterprise, or the share in the equity of the acquired
enterprise if the acquisition occurs in phases, on the one
hand, and the Group’s share in the fair value of the
acquired identifiable assets and liabilities, on the other. If
this difference is negative, it is immediately recognized in
the income statement.
Goodwill is measured at cost less impairment losses. In
respect of equity accounted investees the carrying amount
of the investment in the entity also includes the carrying
amount of the goodwill. Goodwill is not amortized.
Instead, it is subject to an annual impairment test.
Other intangible assets
Other intangible assets acquired by the Group are
measured at cost less accumulated amortization and
impairment losses (see below). Costs of internally gener-
ated goodwill and brands are recognized in the income
statement as incurred.
Internally generated intangible assets
Development activities entail a plan or design for the
production of new or fundamentally improved products
and processes. Internally developed intangible assets are
capitalized whenever the development costs can be
reliably determined, the product or process is technically
and commercially feasible, the future economic benefits
are probable, and the Group intends and has sufficient
resources to complete the development and to actively
use or sell it. The cost of internally developed intangible
assets includes all costs directly attributable to the asset.
Other development costs and expenditures for research
activities are expensed to the income statement as and
when incurred.
64
05 / FINANCIAL REPORT
KINEPOLIS GROUP
ANNUAL REPORT 2014