100 % FUTURE - ALNO

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5. KEY DISCRETIONARY DECISIONS, ASSUMPTIONS AND ESTIMATES
Discretionary decisions
The management took the following discretionary decisions when applying the accounting and
valuation methods:
Two leasing companies are consolidated as special purpose entities since ALNO AG has economic
control of these companies. These are leasing companies, which solely rent the buildings and
associated land on the company property to ALNO AG, and which have been doing so for several
years. Agreements that the lessor concludes in connection with the leased items are subject to
approval by ALNO AG. Any resulting payment obligations are cross-charged in full to ALNO AG.
ALNO AG enjoys the right to purchase the leased objects after the expiry of the rental agreement.
Estimates and assumptions
Assumptions have been made and estimates used in the preparation of the consolidated financial
statements that impact the disclosure and amount of the assets and liabilities, income and expenses,
and contingent liabilities carried in the statements.
When testing goodwill and non-current assets for impairment, the assumptions made and estimates
used mainly relate to the cash flow forecasts and the discount factors (please refer to B.4. “Impairment
testing for goodwill” and C.8. “Amortization of intangible assets and depreciation of property,
plant and equipment”).
There are further uncertainties in connection with the capitalization of future tax refunds, where
assumptions were made regarding the date on which they are expected to occur, and the amount
of the future taxable income over the next four years. In addition, future tax relief was calculated
based on the assumption that there will be no detrimental change in the shareholder situation that
could lead to a removal of losses carried forward within the meaning of Sections 8 Paragraph 4
and 8c of the German Corporate Income Tax Act (KStG) (please refer to C.10. “Income taxes”).
Assumptions and estimates also made when determining economic useful lives for non-current assets
(please refer to B.4. “Intangible assets” and “Property, plant and equipment”), and when determining
the parameters to calculate pension provisions (please refer to D.11. “Pension provisions”) and
partial retirement (please refer to D.12. “Other provisions”). The provision for warranties is subject
to assumptions and estimates that relate to the period of time between the date of delivery and
the period of warranty, and the future warranty charges (please refer to D.12. “Other provisions”).
Value allowances applied to trade receivables are also subject to estimates that relate in particular
to anticipated future cash inflow (please refer to D.6. “Trade receivables”).
These estimates and assumptions are based on premisses that reflect the knowledge available on
the date when the consolidated financial statements are prepared. Although these assumptions
and estimates have been made to the best of the management’s knowledge, the actual results
may differ.