Download - Salzgitter AG

Deferred tax claims in a particular area of fiscal jurisdiction are offset against deferred tax liabilities in
the same area if the company is entitled to offset actual tax liabilities against tax claims and the tax is
levied by the same tax authority; the offsetting is carried out insofar as there is matching maturity.
Income tax liabilities are set off against corresponding tax refund claims if they relate to the same area
of fiscal jurisdiction and their types and maturities match. The change in deferred tax liabilities is
explained under Note 21.
Other Provisions
Provisions are recognized for current obligations to third parties whose occurrence would be likely to
burden Group assets. They are recognized at their likely settlement amount, taking account of all the
discernible risks involved, and are not offset against recourse claims. Provisions are formed only if they
are based on a legal or de facto obligation to third parties.
Financial Liabilities
There are two valuation categories for financial liabilities.
a) Financial liabilities held for trading
As the Salzgitter Group does not designate financial instruments for valuation at fair value through
profit and loss when first recognized (non-application of the fair value option), this category contains
only those derivatives which are not shown in the hedge accounting.
b) Liabilities valued at amortized cost
When they are recorded for the first time, financial liabilities are stated at fair value less transaction
costs. In the subsequent periods, they are basically valued at amortized cost; all differences between
the amount paid out and the amount repaid are then spread over the term of the loan using the
effective yield method.
Financial liabilities are classified as current liabilities if the liability is going to be settled within 12 months
of the reporting date.
Income and Expense Recognition
Sales and other operating revenues are recognized when performance has been rendered or assets
have been furnished, and thus when the risk has already passed. In the case of construction contracts,
revenues are recognized using the percentage-of-completion method.
Dividend is collected when the claim has been legally accrued; interest paid and interest income are
reported pro rata temporis. When there are changes in the consolidated group, acquired dividend
claims are recorded without effect on income as part of the capital consolidation.