Financial fixed assets
Participating interests where significant influence is exercised over the business and financial policy are valued according to the equity method on the basis of net asset value. If valuation on the basis of the net asset value cannot take place as the information necessary for this cannot be obtained, the participation is valued according to the visible shareholders’ equity.
Participating interests where the company exercises control along with other participants, such as in joint ventures, are valued in the same way.
The net asset value is calculated on the basis of the Company’s accounting policies. If the participating legal entity transfers an asset or a liability to a participation which is valued according to the equity method, the profit or loss emanating from this transfer is processed pro rata on the basis of the relative interest that third parties have in the participations (proportional determination of results). A loss which emanates from the transfer of current assets or a particular reduction in value of fixed assets is processed completely. Results on transactions involving transfer of assets and liabilities between the Company and its participating interests and mutually between participating interests are eliminated to the extent that these cannot be regarded as having been realised.
Participations with a negative net asset value are valued at zero and a share in the profit of the participation in later years in only processed if and to the extent that the cumulative share which has not been processed is entered in the loss. If the Company fully or partially guarantees the debts of the relevant participating interest, or it has the constructive obligation to enable the participating interest to pay its debts (for its share therein), then a provision is recognised accordingly to the amount of the estimated payments by the company on behalf of the participating interest. This provision is recognised primarily to the debit of the receivables on the respective participating interest and for the remainder is presented under provisions.
Participations in which no meaningful control is exercised are valued on the basis of the acquisition price or lower recoverable value. If the situation involves a firm intention to sell, valuation occurs against the possible lower expected sale value. If a legal entity transfers an asset or a liability to a participation which is valued at the acquisition price or current value, the profit or loss emanating from this transfer is processed in the consolidated profit and loss account fully and directly unless the profit on the transfer is not realised in essence.
The loans to non-consolidated participations are initially valued on the basis of the fair value, with directly imputable transaction costs added. These receivables are valued at amortised cost using the effective interest method, less impairment losses.
The accounting policies for other financial fixed assets are included under the heading ‘Financial instruments’.
Dividends from participations which are valued on the basis of the acquisition price are accounted for in the period in which they are declared as income from participations. Any profit or loss is recognised under financial income or expenses.
For tangible and intangible fixed assets an assessment is made as of each balance sheet date as to whether there are indications that these assets are subject to impairment. If there are such indications, then the recoverable value of the asset is estimated. The recoverable value is the higher of the value in use and the net realizable value. If it is not possible to determine the recoverable value of an individual asset, then the recoverable value of the cash flow generating unit to which the asset belongs is estimated.
If the carrying value of an asset (or a cash flow generating unit) is higher than the recoverable value, an impairment loss is recorded for the difference between the carrying value and the recoverable value. In case of an impairment loss of a cash flow generating unit, the loss is first allocated to goodwill that has been allocated to the cash flow generating unit. Any remaining loss is allocated to the other assets of the unit in proportion to their carrying values.
In addition an assessment is made on each balance sheet date whether there is any indication that an impairment loss that was recorded in previous years has decreased. If there is such indication, then the recoverable value of the related asset (or cash flow generating unit) is estimated.
Reversal of an impairment loss that was recorded in the past only takes place in case of a change in the estimates used to determine the recoverable value since the recording of the last impairment loss. In such case, the carrying value of the asset (or cash flow generating unit) is increased up to the amount of the estimated recoverable value, but not higher than the carrying value that would have applied (after depreciation) if no impairment loss had been recorded in prior years for the asset (or cash flow generating unit).
An impairment loss for goodwill is not reversed in a subsequent period, unless the previous impairment loss was caused by an extraordinary specific external event that is not expected to recur and if there are successive external events that undo the effect of the earlier event.
Losses are recorded in the profit and loss account. Interest on an asset subject to impairment will continue to be accounted for via addition of interest from the asset with the original effective interest of the asset.
Disposal of fixed assets
Fixed assets available for sale are stated at the lower of their carrying amount and net realisable value.
Inventories are valued at cost or lower realisable value. The cost price is made up of the acquisition price or production price with the addition of other costs connected with keeping the inventories at their present level and in their present condition. The realisable value is based on the most reliable estimate of the amount that the inventories are expected to yield.
Raw materials and consumables are carried at the lower of cost, determined in accordance with the first-in, first-out (FIFO) principle, and market value.
The inventory of finished product and mini-tubers which have been grown by the Company itself, is stated at cost directly attributable to production. The main part of this is personnel expenses.
The valuation of inventories includes possible impairments that arise on the balance sheet date.
Receivables and securities
The accounting policies applied for the valuation of trade and other receivables and securities are described under the heading ‘Financial instruments’.
Cash and cash equivalents
Cash and cash equivalents are valued on the basis of nominal value. If cash and cash equivalents are not freely available, this is taken into account during the valuation.
Cash and cash equivalents in foreign currency are converted into the functional currency on the balance sheet date at the exchange rate applying on that date. Reference is made to the pricing principles for foreign currency.
Financial instruments that are designated as equity instruments by virtue of the economic reality are presented under shareholders’ equity. Payments to holders of these instruments are deducted from the shareholders’ equity as part of the profit distribution. Financial instruments that are designated as a financial liability by virtue of the economic reality are presented under liabilities Interest, dividends, income and expenditure with respect to these financial instruments are recognised in the profit and loss account as financial income or expense.