The consolidated financial statements are based on the financial statements of Wacker Chemie AG and its consolidated subsidiaries. With one exception, they have December 31 as their closing date. All of the individual financial statements were audited by independent auditors for the purposes of inclusion in the consolidated financial statements.
The capital consolidation, in accordance with the purchase method, is carried out by setting off the acquisition cost against the Group‘s share in the equity of the consolidated subsidiaries at the time of their acquisition or first inclusion in the consolidated financial statements. The consolidated subsidiaries’ equity is calculated on the basis of all identifiable assets and liabilities, while all the balance sheet items are measured at fair values. If the acquisition cost of the investment is greater than the pro rata equity ascertained in this way, the positive difference is capitalized as goodwill and subjected to an annual impairment test. If it is lower, the negative difference is recognized directly as income.
Investments accounted for using the equity method are initially measured at cost. If the cost exceeds the pro rata share of equity, the difference is included in the carrying amount of the investment. The carrying amount has to be tested for possible impairment losses as of the balance sheet date. If the cost is lower than the share of equity at the time of acquisition, this difference is included in the carrying amount and recorded in the income statement as income from investments in joint ventures and associates. All of the other investments are reported as available-for-sale financial instruments.
Intragroup results, sales, expenses, income, receivables, and liabilities between the consolidated companies as well as pro rata profits and losses resulting from transactions with associated companies are eliminated.
For those consolidation entries which affect income, the income tax effect is taken into account and deferred taxes are included.