Catom Annual Report 2019 EN

3.5. Cost of goods sold Cost of goods sold is defined as the direct costs of the goods sold and services rendered that are attributable to the turnover. 3.6. Other operating expenses Other operating expenses is defined as the expenses recognised in the year that are not directly attributable to the cost of the goods delivered. 3.7. Depreciation of tangible and amortisation of intangible fixed assets Intangible fixed assets including goodwill are amortised, and tangible fixed assets are depreciated, on a straight-line basis over the expected useful life of the asset, starting from the date on which the asset is taken into use. Land and real estate investments are not depreciated. Positive goodwill is amortised on a straight-line basis over the estimated useful life. Negative goodwill is released in the profit and loss account insofar as expenses and losses are incurred, provided that these expenses and losses were taken into account when the acquisition was recognised, and provided that they can be measured reliably. If expected expenses and losses were not taken into account, the negative goodwill is released in proportion to the weighted average of the remaining useful life of the acquired amortisable assets. Insofar as the negative goodwill exceeds the fair value of the identifiable non-monetary assets, the excess is credited directly to the profit and loss account. If the estimated useful life is modified, the future amortisation or depreciation charges will be adjusted accordingly.

Capital gains and losses from one-off sales of tangible fixed assets are included under depreciation.

3.8. Employee benefits 3.8.1. Periodic remuneration

Wages, salaries and social charges that the company owes under the terms and conditions of employment are charged to the profit and loss account insofar as they are due to employees.

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