Summary of Significant Accounting and Valuation Methods

Recognition of sales and income

Sales are recognized on delivery of goods or services and on the transfer of risk to the purchaser.

Expense recognition

Expenses are recognized as incurred and when the service is utilized.

Taxes

Deferred taxes are recognized for temporary differences, for consolidation measures recognized in income and for tax loss carryforwards whenever their realization is sufficiently probable.

Intangible assets and property, plant and equipment

These are measured at amortized cost. They are generally amortized/depreciated on a straight-line basis.

Government grants

Subsidies provided by government bodies either reduce acquisition or production costs, or are recognized in the statement of income.

Inventories

These are measured at amortized cost, using the average cost method.

Receivables and other assets

These are measured at amortized cost. Risks are accounted for through valuation allowances.

Provisions for pensions and similar obligations

These are determined using the projected unit credit method. Actuarial gains and losses are recognized as income or expenses once they exceed the specified corridor. Actuarial gains and losses arising from the changed or adjusted mortality tables are posted immediately to the statement of income as a reduction or increase in the provision for pensions.

Financial instruments

On initial recognition, financial instruments (other financial assets and financial liabilities) are measured at fair value.