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noteS TO THE CONSolidated FINANCIAL StatementS
conSolidated FINANCIAL StatementS FOR THE Year ENDED 31 DECEMBER 2011
(8) LONG-term EMPLOYment BENEFITS
Defined benefit plans
Defined benefit plans apply to pension commitments in Austria and Germany as well as severance pay obligations
in Austria, Slovenia and Bulgaria.
Employees whose employment contract is governed by Austrian law and whose employment status started
before 1 January 2003 are entitled to a severance payment if their contract is terminated by the employer or
if they leave the company early for good cause, provided that their employment lasted for three years without
interruptions. In addition, if their employment lasted for at least ten years, they are entitled to a severance payment
upon any kind of termination of employment when they have reached the statutory pensionable age. The
amount of the severance payment depends on the amount of the remuneration paid at the time of termination
and the length of service.
Provisions for pensions and other post-retirement benefits as well as for severance payments and anniversary bonuses
are valued using the projected unit credit method. Under this method, anticipated benefits are distributed
over the working lifespan of the employees until retirement. Anticipated future salary increases are taken into account.
The amounts of the provisions are determined on the basis of an actuarial opinion prepared by an actuary
as at the balance sheet date.
According to IAS 19, actuarial gains and losses are recognized in the balance sheet if they relate to provisions for
pensions and other post-retirement benefits or for severance payments.
Defined contribution plans
Defined contribution plans have been introduced at various Group companies on the basis of statutory obligations.
In addition, individual pension agreements have been entered into. Contributions to such defined contribution plans
are recognized as expenses in the period for which they are paid.
Other long-term employment benefits
Other long-term employment benefits refer primarily to collective bargaining commitments for payment of
anniversary bonuses depending on years of service for the employees of Austrian and Slovenian companies. In
accordance with IAS 19, actuarial gains and losses are recognized as employee benefits expenses in the income
statement if they relate to provisions for anniversary bonuses.
(9) OTHER PROVISionS
Other provisions were formed to reflect the level of uncertain liabilities, recognizing the amount associated with
the highest level of probability of occurrence of individual obligations as the best estimate. Where the provision
being measured involved a large population of items, the expected-value method of estimation was applied.
Non-current provisions are reported at their present value.
(10) LIABILITIES FROM PUTTABLE NON-controlling INTERESTS
Puttable or fixed-term interests held by non-controlling shareholders of subsidiaries constitute financial liabilities
and are reported under “liabilities from puttable non-controlling interests”. At first, the liabilities are recognized
at the fair value of the interest held by the non-controlling shareholder in the subsidiary at the time the obligation
was entered into. Provided that the other shareholders are the beneficial owners of the interests, the results
and payments are still attributed to the non-controlling interests. At the balance sheet date, they are reclassified
to liabilities, and differences, if any, between the non-controlling interest and the obligation are presented under
retained earnings. If, however, the other shareholders are not the beneficial owners, they are presented as an
accelerated acquisition.
palfinger Annual Report 2011
129