Page 84 - Restamax Plc Annual Report 2017

Items denominated in a foreign currency The profits and losses from the sales of tangible assets
are included in the income statement as other operating
The consolidated financial statements are presented in income or expenses.
euros, which is the operating and presentation currency
of the Group’s parent company. Intangible assets

Business transactions denominated in a foreign currency The Group’s intangible assets mainly consist of goodwill
have been recorded in the functional currency, using the generated from the combination of business operations
exchange rate in force on the date of the transaction. as well as other intangible assets resulting from the
Monetary items denominated in a foreign currency have same, such as the rights to use names, non-competition
been converted into the functional currency using the agreements and beneficial lease agreements.
exchange rates on the end date of the reporting period.
Profits and losses generated by business transactions Goodwill generated from the combination of business
denominated in a foreign currency and conversion of operations is recorded at the amount by which the
monetary items have been recorded through profit of assigned purchase consideration, the share of non-
loss. Foreign exchange gains and losses are included in the controlling interests in the object acquired and the previ-
corresponding items above operating profit. The Group ously owned share combined exceed the fair value of the
has minor items denominated in a foreign currency. acquired net assets.
Property, plant and equipment Depreciations of goodwill or other intangible assets with
unlimited useful lives are not recorded; instead, they are
Property, plant and equipment have been measured at tested for possible impairment each year. Non-compe-
their original acquisition cost less the accumulated depre- tition agreements that are valid until further notice are
ciations and devaluations. The original acquisition cost considered to have an unlimited useful life. Goodwill and
includes the immediate costs for the purchase. Expendi- the non-competition agreements mentioned above are
ture accumulated later is only included in the book value measured according to their original acquisition cost less
or recorded as a separate commodity if it is likely that the impairment.
future economic benefit related to the commodity will be
to the benefit of the Group, and if the acquisition cost of Other intangible assets with a limited useful life that
the commodity can be reliably defined. Repair and main- have been specified during the combination of business
tenance costs are recorded through profit or loss for the operations are recorded separately from goodwill on the
period during which they were realised. If a fixed asset balance sheet if they fit the definition of a commodity and
commodity consists of several parts with useful lives of can be itemised, or if they are created by agreements or
different lengths, each part is processed as a separate legal rights and their fair value can be reliably defined.
commodity. As is typical for the segment, property, plant Such intangible assets are measured at their original
and equipment also includes periodic modification and acquisition cost and depreciated as straight-line depre-
renovation costs of the rental premises of restaurants; ciations during their known or estimated useful life as
these consist of the interior finishing work of rental follows:
premises, for example.
Right to use a name 5-10 years
Depreciation of property, plant and equipment is calcu- Non-competition
lated as degressive depreciations from the book value, or agreement (limited) 2-3 years
as straight-line depreciations, where the acquisition cost Beneficial lease agreements 2-10 years
is recorded as expense over the useful lives as follows: Customer agreements 3-10 years
Machinery and equipment, residual value depreciation The Group did not have any research and development
25.0 per cent costs in 2016-2017.
Modification and renovation expenses for rental premises Impairment of tangible and intangible assets
5–10 years
On each closing date, the Group evaluates whether there
Buildings 30 years are signs that the value of an asset item has degraded. If
these signs should appear, the recoverable amount for the
The residual values of tangible assets and their useful asset item is estimated. Furthermore, recoverable amounts
lives are verified at least once per year on the closing are estimated each year for the following asset items,
date, and adjusted by impairment when necessary. On regardless of whether there are signs that their value has
each closing date, the Group evaluates whether there degraded: goodwill, intangible assets with unlimited useful
are signs that the value of an asset item has degraded. If lives, and incomplete intangible assets. The need to record
the book value of an asset item is higher than its recov- any impairment is examined on the level of the cash-flow
erable amount, the book value of the asset item will be generating unit or units; that is, the lowest level that is
immediately lowered to match the recoverable amount. mostly independent of the other units and whose cash flow
When property, plant and equipment are classified as can be separated from the other cash flows.
available for sale in accordance with the IFRS 5 standard,
the recording of depreciations is discontinued. The recoverable amount is the fair value of the asset item
less the costs to sell, or the utility value, if it is higher.
The utility value refers to the estimated deferred net cash
flows that are available from the asset item or cash-flow

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