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ePaper created 2015-05-06, 08:22:31 | version 1.38.0
60 i) Joint ventures, associates, and other investments Significant investments in joint ventures and associates are measured at the relevant proportion of equity using the equity method. If these entities have different balance sheet dates, interim financial statements are used for them. Interests in unconsolidated affiliated entities and investments are carried at cost. If there is objective evidence of impairment, an impairment loss is recognized in the amount of the difference between the carrying amount and the present value of estimated future cash flows. Reversals are not permitted. j) Leases Assets from lease arrangements are reported under property, plant, and equipment if the material risks and benefits of ownership of the assets are transferred to the Heraeus Group in accordance with IAS 17 (finance leases). Leases are classified using the useful life of the underlying property, plant, and equipment and the interest rate implicit in the lease or, if it is not practical to determine the latter, the Group’s incre- mental borrowing rate of interest. Leased assets are recognized on the balance sheet at the lower of the fair value of the leased asset at the inception of the lease and the present value of the minimum lease payments. A liability is rec- ognized in the same amount. In subsequent measurements, capitalized leased assets are depreciated using the straight-line method over their useful economic life or the lease term, whichever is shorter. Their useful economic lives are based on those applicable to property, plant, and equipment. Payment obligations arising from future lease installments are reported under other current or non-current liabilities depending on their term to maturity. k) Financial instruments Financial instruments include non-derivative financial instruments such as trade receivables, trade payables, and other financial receivables and liabilities. There are also derivative financial instruments, which are used to hedge currency, price, and interest-rate risk. Financial assets are classified into the following categories: • loans and receivables (LaR), • financial assets measured at fair value through profit or loss (derivatives with positive fair value classed as held for trading, financial assets held for trading (FAHfT)), • held-to-maturity investments (securities classed as held to maturity, (HtM)), and • available-for-sale financial assets (securities classed as available for sale (AfS)).