DGRE Delek Glbl

rewards of ownership of these properties and so accounts for the contracts as 
operating leases. 
 
 
Estimates and assumptions 
 
 
The key assumptions concerning the future and other key sources of estimation 
uncertainty at the balance sheet date, that have a significant risk of causing a 
material adjustment to the carrying amounts of assets and liabilities within the 
next financial year are discussed below. 
 
 
 
 
 
 
 
NOTE 2:-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) 
 
 
Investment properties 
 
 
As described in Note 5, the directors use significant judgment in determining 
the fair value of investment properties where there is an absence of an active 
market for similar property in the same location and condition and subject to 
similar lease and other contracts. The directors have engaged accredited 
independent valuers to determine fair value based on comparable arm's length 
transactions, where they exist, together with discounted cash flow projections. 
The fair value of investment properties at 31 December 2008 is GBP2,183 million 
(2007: GBP2,187 million). Details of the key factors considered in the 
valuations are provided in Note 5. 
 
 
Impairment of non-financial assets 
 
 
The Group assesses whether there are any indicators of impairment for all 
non-financial assets at each reporting date. Goodwill and other indefinite life 
intangibles are tested for impairment annually and at other times when such 
indicators exist. Other non-financial assets are tested for impairment when 
there are indicators that the carrying amounts may not be recoverable. 
When value in use calculations are undertaken, management must estimate the 
expected future cash flows from the asset or cash-generating unit and choose a 
suitable discount rate in order to calculate the present value of those cash 
flows. 
 
 
    Available-for-sale financial assets 
 
 
The Group classifies certain assets as available-for-sale and recognises 
movements in their fair value in equity. The directors use significant judgement 
in determining the fair value of available-for-sale investments. When the fair 
value declines, management makes assumptions about the decline in value to 
determine whether it is an impairment that should be recognised in the income 
statement. At 31 December 2008 no impairment losses have been recognised for 
available-for-sale assets (2007: GBPnil). 
 
 
Deferred tax assets 
 
 
Deferred tax assets are recognized for all unused tax losses to the extent that 
it is probable that taxable profit will be available against which the losses 
can be utilised. Significant management judgment is required to determine the 
amount of deferred tax assets that can be recognised, based upon the likely 
timing and level of future taxable profits together with future tax planning 
strategies. Further details are contained in Note 22. 
 
 
2.4a.    Foreign currency translation 
 
 
The consolidated financial statements are presented in British Pounds, which is 
the Group's functional and presentation currency. Each entity in the Group 
determines its own functional currency and items included in the financial 
statements of each entity are measured using that functional currency. 
Transactions in foreign currencies are initially recorded at the functional 
currency rate ruling at the date of the transaction. Monetary assets and 
liabilities denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date. All differences are 
taken to the income statement. Non monetary items that are measured in terms of 
historical cost in a foreign currency are translated using the exchange rates as 
at the dates of the initial transactions. 
 
 
NOTE 2:-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) 
 
 
 
 
Non monetary items measured at fair value in a foreign currency are translated 
using the exchange rates at the date when the fair value is determined. Any 
goodwill arising on the acquisition of a foreign operation and any fair value 
adjustments to the carrying amounts of assets and liabilities arising on the 
acquisition are treated as assets and liabilities of the foreign operation and 
translated at the closing rate. 
 
 
 
 
The assets and liabilities of foreign operations are translated into British 
Pounds at the rate of exchange ruling at the balance sheet date and their income 
statements are translated at the weighted average exchange rates for the year. 
The exchange differences arising on the translation are taken directly to a 
separate component of equity. On disposal of a foreign entity, the deferred 
cumulative amount recognised in equity relating to that particular foreign 
operation is recognised in the income statement. 
 
 
 
 
b.    Investment property: 
 
 
Property held for long term rental, for capital appreciation or both is 
classified as investment property. 
 
 
Investment property is measured initially at its cost, comprising its purchase 
price and all directly attributable costs (including transaction costs). 
Subsequent costs are included in the property's carrying amount only when it is 
probable that future economic benefits associated with the item will flow to the 
Group and the cost can be measured reliably. The carrying amount of investment 
property excludes the costs of day-to-day servicing. Subsequent to initial 
recognition, the investment property is stated at fair value as determined by 
independent property appraisers, which reflects market conditions at the balance 
sheet date. Gains or losses arising from changes in the fair values of 
investment properties are included in the income statement in the period which 
they arise. Investment properties are not depreciated. 
 
 
The last valuation for investment properties was carried out at 31 December 
2008. All investment properties have been valued individually, not as a 
portfolio. 
 
 
Investment properties are derecognised when either they have been disposed or 
when the investment property is permanently withdrawn from use and no future 
economic benefit is expected from its disposal. Any gains or losses on the 
retirement or disposal of an investment property are recognised in the income 
statement in the year of retirement or disposal. 
 
NOTE 2:-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) 
 
 
 
 
c.    Investment in associates: 
 
 
The Group's interest in associates is accounted for under the equity method of 
accounting. An associate is an entity in which the Group has significant 
influence and which is neither a subsidiary nor a joint venture. 
 
 
 
 
Under the equity method, the investment in the associate is carried in the 
balance sheet at cost plus post-acquisition changes in the Group's share of net 
assets of the associate. Goodwill relating to an associate is included in the 
carrying amount of the investment and is not amortised. After application of the 
equity method, the Group determines whether it is necessary to recognise any 
impairment loss with respect to the Group's net investment in the associate. The 
income statement reflects the share of the results of operations of the 
associate. 
 
 
 
 
Where there has been a change recognised directly in the equity of the 
associate, the Group recognises its share of any changes and discloses this, 
when applicable, in the statement of changes in equity. 
 
 
The reporting dates of the associate and the Group are identical and the 
associates' accounting policies conform to those used by the Group for like 
transactions and events in similar circumstances. 
 
 
 
 
d.    Investments and other financial assets: 
 
 
Initial recognition 
 
 
Financial assets in the scope of IAS 39 are classified as either financial asse 
s at fair value through the income 
statement, loans and receivables, or available-for-sale financial assets, as 
appropriate. When financial assets are recognised initially, they are measured 
t fair value, plus, in the case of investments not at fair value through the 
income statement, directly attributable transaction costs. The Group 
determines the classification of its financial assets after initial recognition 
and, where allowed and appropriate, 
re-evaluates this designation at each financial year-end. 
 
 
Subsequent measurement 
 
 
Financial assets at fair value through the income statement: 
Derivatives are classified as held for trading unless they are designated as ef 
ective hedging instruments. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 2:-    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) 
 
 
 
 
Loans and receivables: 
Loans and receivables are non-derivative financial assets with fixed or determi 
able payments that are not 
quoted in an active market. Such assets are carried at amortised cost using the 
effective interest method. 
Gains and losses are recognised in income when the loans and receivables are de 
ecognised or impaired, as well as through the amortisation process. 
 
 
Available-for-sale financial assets: 
Available-for-sale financial assets are those non-derivative financial assets t 
at are designated as available-for-sale or are not classified in any of the pre 
eding categories. After initial recognition available-for sale 
financial assets are measured at fair value with gains or losses being recognis 
d as a separate component of equity until the investment is derecognised . 
 
 
The fair value of investments that are actively traded in organised financial 
markets is determined by reference to quoted market bid prices at the close of 
business on the balance sheet date. For investments where there is no active 
market, fair value is determined using valuation techniques, where reliable 
information is available. Such techniques include using recent arm's length 
market transactions; reference to the current market value of another 
instrument, which is substantially the same; discounted cash flow analysis and 
option pricing models. 
 
 
Impairment of financial assets 
 
 
The Group assesses at each balance sheet date whether there is any objective 
evidence that a financial asset or group of financial assets are impaired. A 

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