Annual Report 2010 - Falck

60 Falck Annual Report 2010 | Group
Notes to the Group financial statements
Note
1 Accounting policies (continued)
Revenue is measured at the fair value of the agreed consideration
excluding VAT and other taxes collected on behalf of third
parties. All discounts granted are recognised in revenue.
Other operating income represents revenue of a secondary
nature relative to the Group’s principal activities, such as gains
on the sale of assets and rental income.
Cost of sales and external assistance represents costs incurred
and external assistance used to generate the year’s revenue.
Other external costs include costs relating to operating and
maintaining equipment and property as well as sales and
administrative expenses.
Staff costs represent salaries and wages, pension contributions,
social security costs and other staff costs.
Goodwill impairment represents impairment of goodwill based
on an annually performed impairment test of each cashgenerating
unit.
Exceptional items represent material items of a non-recurring
nature that are not directly attributable to the Group’s ordinary
activities.
Income from investments in associates in the consolidated
financial statements represents the proportionate share of
the results after tax in the associates, made up according to
the Group’s accounting policies and after elimination of the
proportionate share of intra-group profits/losses.
Dividend from Group companies is recognised in the parent
company’s income statement in the financial year in which
the dividend is declared. An impairment test is made if more
than the period’s comprehensive income in subsidiaries and
associates is distributed in the period in which the dividend is
declared.
Financials represent interest receivable and payable, realised
and unrealised capital gains and losses and amortisation
related to financial assets and liabilities. Dividends to capital
holders who have received put options in connection with
business combinations are recognised as a financial expense
in the cases where the option price is independent of dividend
payments. Financials are recognised at the amounts related to
the year. Furthermore, realised and unrealised gains and losses
on derivative financial instruments which cannot be classified
as hedging arrangements are included.
INCOmE TAXES
Tax on the profit for the year represents corporation tax
payable and changes in deferred tax. Tax for the year that is
attributable to amounts recognised in other comprehensive
income is recognised in other comprehensive income.
Joint taxation
The parent company is taxed jointly with its domestic subsidiaries.
Corporation tax for the jointly taxed Danish companies
is allocated according to the taxable income of these
companies.
Falck A/S is the management company for the national joint
taxation and consequently settles all payments of income
taxes with the tax authorities in respect of the jointly taxed
companies.
Income taxes payable
Corporation tax payable includes corporation tax made up on
the basis of estimated taxable income for the financial year
and prior-year adjustments.
Deferred tax
Deferred tax is calculated according to the balance sheet liability
method and is based on all timing differences between the
accounting and tax value of assets and liabilities.
Deferred tax is not recognised on goodwill that is not tax
deductible, and deferred tax is not recognised on undistributed
profits in subsidiaries and timing differences that arose
at the time of recognition in the balance sheet other than for
acquisitions if such differences will not affect profit or taxable
income.
When alternative tax rules can be applied to determine the
tax base, deferred tax is measured based on the management’s
planned use of the asset or settlement of the liability
respectively.
Deferred tax assets, including the tax base of tax loss carryforwards,
are recognised under other non-current assets
at the expected value of their utilisation, either as a set-off
against tax on future income or as a set-off against deferred
tax liabilities within the same legal tax entity and jurisdiction.
Deferred tax assets and liabilities are offset within the same
legal tax unit or jurisdiction. Deferred tax assets are measured
at the value at which they are expected to be realised.