01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

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01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

Provisions for pension benefits and similar obligations

Other accruals

Liabilities

Premiums

Consolidated Financial Statements

Group companies for the most part use defined-benefit plans to provide pension

benefits. Defined-benefit pension plans are accounted for pursuant to IAS 19 using the

projected unit credit method and taking into account actuarial parameters. Calculation

is based on the use of current mortality tables, disability and fluctuation probability,

assumptions on increases in remuneration and annuities and a realistic discount rate.

Actuarial gains and losses result from differences between actual obligations and

benefits paid and obligations and benefits anticipated based on actuarial assumptions

as well as from changes in actuarial assumptions. Actuarial gains and losses are

accounted for using the corridor method pursuant to IAS 19.92.

Other accruals and provisions are established in amounts based on the best estimate of

the outflow of funds required to settle the corresponding obligations as of the reporting

date. Long-term accruals and provisions are discounted if the interest effect is significant.

This item includes participation certificates, subordinate liabilities, bonds and loans,

deposits received from reinsurers and other liabilities. These liabilities are all recognized

at repayable amounts or amortized cost. Investments held for trading with a

negative fair value are also shown under this item.

Earned premiums do not contain those components of premiums that may be recognized

in the statement of income only after the reporting date. In property/casualty

insurance, premiums are essentially booked as income on a day-by-day basis over the

term of the insurance contract. Unearned premiums are calculated and deferred for each

individual contract. Premium income from short-term accident and health insurance

contracts is recorded on a pro rata basis over the term of each contract. In classical life

insurance and in long-term accident and health insurance contracts, premiums are

booked as earned when due. At the same time, reserves for anticipated benefits are

formed to spread profits over the term of the contracts.

Gothaer Group Annual Report 2009 131

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