c. Financial Assets and Investments in Associated Companies
These long-term investments consist primarily of shares in associated companies, non-current securities and loans.
Investments in associated companies (generally investments of between 20% and 50% in a company’s equity) where a significant influence is exercised by the Group are accounted for by using the equity method. An assessment of investments in associates is performed when there is an indication that the asset has been impaired or the impairment losses recognized in prior years no longer exist.
Non-current securities held on a long-term basis are initially recognized at acquisition costs including transaction costs and are classified as available-for-sale investments. In subsequent periods, other non-current securities held on a long-term basis are valued at fair value. Changes of these fair values are recognized as gains or losses directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognized in equity is included in profit or loss of the period. Interest on these non-current securities is recognized directly in the income statement in the period during which they occur. Equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recorded at cost.
Financial assets classified as loans and receivables are measured at amortized costs using the effective interest method less any impairment losses.