Annual Report 2010 - Knorr-Bremse AG.

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1
Principles and methods
The consolidated financial statements have been drawn up in accordance with generally accepted
accounting principles, complying with the accounting requirements of the German Commercial Code
(HGB) and additional statutory provisions. Figures in the consolidated financial statements are shown
in thousands of euros (TEUR). Certain items on the balance sheet and in the statement of income are
combined for the sake of greater clarity. These items are explained separately in the Notes to the Consolidated
Financial Statements.
Accounting and valuation
The financial statements of the companies included in the consolidated financial statements are prepared
according to uniform principles of accounting and valuation applied to the Group. For the purposes
of consolidation according to the equity method, any valuations in the financial statements of
the associated companies that deviate from the uniform principles applied to the Group are retained.
In fiscal year 2010, the provisions of the German Accounting Law Modernization Act are applied for
the first time. Because this is the first time they have been applied, the requirements of §§ 252 (1) no.
6, 265 (1), 284 (2) no. 3 and 313 (1) no. 3 of the German Commercial Code (HGB) have not been applied,
as provided for under Article 67 (8) of the Act Introducing the German Commercial Code (EGHGB). In
accordance with EGHGB Article 67 (8) clause 2 subclause 1, the previous year’s figures have not been
adjusted. Consequently the previous year’s figures are only comparable with the figures for the year
under review to a limited extent, as specified in HGB § 265 (2) clause 2.
Purchased intangible assets are valued at acquisition cost less scheduled depreciation; additional depreciation
is taken where necessary.
Fixed assets are recorded at acquisition or production cost, less scheduled depreciation in the case of
items subject to wear and tear; additional depreciation is taken where necessary. Depreciation on
fixed assets is generally applied using the linear method, based on useful life. In the case of German
companies included in consolidation, additions prior to January 1, 2008 and after January 1, 2009 are
for the most part depreciated using the declining balance method, switching over to the linear method
as soon as the latter results in higher depreciation. For fiscal year 2010, application of the linear
method results in a difference of TEUR 496. Minor fixed assets are depreciated to the maximum extent
permissible under the respective countries’ tax provisions.
Interests in affiliated, associated and related companies and miscellaneous investments are stated at
cost or, in the event of a probable sustained diminution in value, at fair value (where the latter is lower).
Materials and supplies are carried in inventories at the lower of average acquisition cost or replacement
cost. Provision against realization risks is made where necessary.