Page 85 - Restamax Plc Annual Report 2017

generating unit, discounted to their present value. The price method. Acquisition cost includes the immediate
discount rate is the rate before tax that presents the expenses for the purchase, with value added tax deducted.
market’s view of the value of money over time, and the The net realisable value is the estimated selling price that
special risks related to the asset item or cash-flow gener- can be achieved during ordinary course of business less
ating unit. the costs to sell.

An impairment loss is recorded when the book value of Inventories include ingredients for restaurant food as
an asset item is lower than its recoverable amount. The well as alcohol and tobacco products.
impairment loss is immediately recorded in the income
statement. The impairment loss of a cash-flow gener- Pension obligations
ating unit is primarily allocated to reduce the goodwill
of the cash-flow generating unit, and secondly it is used Pension obligations are defined as benefit-based or
to impair the unit’s other asset items on a pro rata basis. defined contribution plans. The Group’s pension plans
The useful life of a depreciable asset item is reassessed in Finland, as required by legislation, have been classi-
when an impairment loss is recorded. An impairment loss fied as defined contribution plans. In a defined contribu-
recorded for an asset item is reversed whenever a change tion plan, the Group pays fixed fees for a pension plan to
occurs in the estimates that have been used to determine a pension insurance company. The Group is not legally
the recoverable amount of the asset item. or constructively obligated to make additional payments
if the recipient of the payments does not have sufficient
However, impairment loss is only reversed up to the book funds to pay the pension benefits that the employees
value of the commodity without any impairment loss. have earned for the current period or periods preceding
Impairment loss for goodwill is not reversed under any it. In a defined contribution plan, the payments made
circumstances. are recorded into the income statement for the financial
period that the charge applies to.
Lease agreements
Income recognition principles
The Group as a lessee
Sale of goods
Lease agreements concerning property, plant and
equipment where the Group has a material part of the The Group’s turnover is mostly generated from the sale of
risks and benefits of ownership are classified as finance drinks, food and cigarettes within its restaurant business.
lease agreements. Asset items acquired by means of such
an agreement are recorded on the balance sheet at the The amount of profit recorded at the time of sale consists
commencement of the lease term at the fair value of the of the fair value of the compensation that is or will be
commodity, or at the present value of the minimum lease received for the sold item, less any value added tax as
payments, whichever is lower. Commodities acquired well as volume discounts and other discounts. Most of the
using finance lease agreements are depreciated over Group’s income is generated from retail sales, where the
the useful life of the commodity, or, whenever there is payment instruments are cash and credit cards.
no certainty that ownership rights will be transferred to
the lessee after the lease term, over a lease term that is Sale of services
shorter than the useful life. The lease payments paid are
divided between finance charges and repayment of debt Sale of services is recorded as income for the financial
over the lease term, so that the remaining debt for each period during which the service is performed and during
period will have the same interest rate. The lease liabili- which the financial benefits from the service will probably
ties are included in financial liabilities. be received. The sale of services is also included in the
Group’s turnover.
Lease agreements where the lessor is responsible for the
risks and benefits of ownership are processed as other The Group’s service sales income is formed by the sales
lease agreements. Lease payments on the basis of other of labour hire operations, advertising space, marketing
lease agreements are recorded in the income statement space or other similar space, as well as tickets.
as annuities over the lease term.
Rental income
The Group as a lessor
Rental income is recorded as annuities over the lease period.
Commodities leased out with agreements other than
finance lease agreements are included in the property, Interest and dividends
plant and equipment on the balance sheet. They are
depreciated over their useful life, similarly to property, Interest income is recorded using the effective interest
plant and equipment used by the Group for similar method, and dividend yield is recorded for the period
purposes. Lease income is recorded into the income during which the right to the dividend has been generated.
statement as annuities over the lease term.
Non-current asset items classified as held for
Inventories sale and discontinued operation
Inventories are measured according to their acquisition Non-current asset items (or disposal groups) and assets
cost or their net realisable value, whichever is lower. and liabilities related to discontinued operation are classi-
Acquisition cost is defined using a weighted average fied as held for sale if the amount corresponding to their

CONSOLIDATED FINANCIAL STATEMENTS 85