ment loss is recognized when the carrying amount of the cash-generating unit, to which goodwill was allocated, exceeds the higher of its fair value less costs to sell or its value in use. In the event that facts and circumstances indicate that the Company’s property, plant and equipment or intangible assets including goodwill, may be impaired, an impairment test is performed. This is the case regardless of whether they are to be held and used or to be disposed of. An impairment loss is recognized when an asset’s carrying amount exceeds the higher of its fair value less costs to sell and its value in use. Value in use is based on the discounted cash flows expected to arise from the continued use of the asset or from its even- tual disposal. Any impairment loss resulting from this test is reported in other operating expenses. If there is any indication that the considerations which led to an impairment of property, plant and equipment or intangible assets no longer exist, the Company considers the need to reverse all or a portion of the impairment loss except for goodwill. Government Grants Taxable and non-taxable government grants for the acquisition of certain non-current assets are recognized as a reduction of the cost basis of the acquired or constructed assets. Non- refundable reimbursement of cost is recorded as other operating income or as a deduction from the related expenses if all the conditions stipulated are met. Long-term Investments and Marketable Securities In accordance with IAS 39, “Financial Instruments: Recognition and Measurement,” the Com- pany classifies all marketable securities and certain long-term investments (see note 15) as available-for-sale. At the reporting date these financial instruments are carried at fair value or amortized cost, with unrealized gains and losses recorded in the item “Financial assets available-for-sale” in other comprehensive income, net of income tax. Long-term investments and marketable securities are recognized on the settlement date. The Company derecognizes these assets when the contractual right to the cash flows expires or the assets are transferred and the Company retains no contractual rights to receive cash and assumes no obligations to pay cash from the assets. Impairment losses on marketable securities are recognized in the financial result if the decrease in value is material or permanent in nature at the reporting date. Investments in Associated Companies Associated companies are companies in which ALTANA can exercise significant influence, which is generally the case when it holds from 20 up to 50 % of the voting power of the investee. Investments in associated companies are accounted for by applying the equity method in accordance with IAS 28, “Investments in Associates and Joint Ventures.” The respective investment is initially recognized at cost and the carrying amount is increased or decreased to recognize ALTANA’s share of changes in the investee’s equity after the acquisition. ALTANA’s share of profit or loss of the investee is recognized in the Company’s income statement while 92 Notes to Consolidated Financial Statements
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