54 Finance - 2023 Tangible fixed assets Tangible assets mainly refer to installations, vehicles, office furniture and IT equipment. They are recorded at acquisition cost, reduced by the cumulated straight-line depreciation, determined according to their expected useful life. Useful lives are established as follows and are reviewed each year: Installation and furniture 1-3 years Vehicles and IT equipments 1-3 years If there is any evidence of an overstatement, the accounting values are reviewed and adjusted where necessary. Intangible fixed assets Intangible assets consist of software of the Company and CO2 certificates. Software is recorded at acquisition cost, reduced by the cumulated straight-line depreciation, determined according to their expected useful life. Under the CO2 act, Transitgas AG is required to participate in the Swiss emissions trading system (CH-EHS) and to monitor and report its yearly emissions. The CH-EHS is set up under the ‘cap-and-trade’ principle. Each year a certain amount of emission allowances are allocated free of charge to the respective companies participating. These allowances are limited and determined in advance by an absolute emissions limit (cap). If an company is not able to fully offset its obligations with freely allocated emission allowances it needs to acquire these through the CH-EHS. Free emission allowances allocated by the Swiss Federal Office for the Environment (BAFU) are initially recorded at their nominal value (zero). Acquired emission allowances for the purpose of the own usage are initially recognised at their acquisition cost under intangible fixed assets. A provision is recognised when the CO2 emissions exceed the free emission allowances initially allocated. If there are already acquired emission allowances, the provision is built at the acquisition cost of the acquired emission allowances. If the CO2 emissions are also exceeding the acquired emission allowances, that part of the provision is built at the current fair value of emission allowances.
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