THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

company is lost. The changed provisions are to be applied at the
latest for fiscal years commencing on or after July 1, 2009. It is not
expected that the revised IAS 27 will have an impact on future financial
statements of the Symrise Group.
IAS 32 (“Puttable Financial Instruments and Obligations Arising
on Liquidation”) includes revised provisions to differentiate
between equity and debt. The changed provisions are to be applied
for the first time to fiscal years commencing on or after January
1, 2009. It is not expected that the changed version of IAS 32
will have any significant impact on the consolidated financial statements
of Symrise AG.
The supplementary amendments to IAS 39 (“Financial Instruments:
Recognition and Measurement: Eligible Hedged
Items”) explain, amongst other things, the conditions under which
inflation risks can be hedged as hedged items within the context
of hedging transactions as well as the possibility of using options
as hedging instruments to hedge unilateral risks. The interpretation
is to be applied to fiscal years commencing on or after January 1,
2009. Earlier application is recommended. Impacts on the Symrise
Group are currently being assessed.
IFRIC 13 (“Customer Loyalty Programmes”) governs the accounting
for companies that offer loyalty programs to their customers
or that participate in such programs. The type of loyalty
programs covered are those under the terms of which loyalty
award credits for free or discounted goods or services are granted
to customers, who receive these when they purchase other goods
or services. The interpretation should be applied for the first time
to fiscal years commencing on or after July 1, 2009. It is not expected
that IFRIC 13 will have any significant impact the consolidated
financial statements of Symrise AG.
IFRIC 15 (“Agreements for the Construction of Real Estate”)
addresses the standardization of accounting practices used by
companies that undertake the development of real estate and in
this capacity sell units - such as, for example, apartments or
houses – “off plan,” i.e. before these are completed. This interpretation
should be applied to fiscal years that commence on or
after January 1, 2009. Earlier adoption is recommended. It is not
expected that IFRIC 15 will have any impact on the consolidated
financial statements of Symrise AG.
IFRIC 17 (“Distributions of Non-cash Assets to Owners”) addresses
issues as to how a company should measure assets used
to make distributions other than cash that are used to pay dividends
to shareholders. IFRIC 17 comes into effect for financial
Annual Report 2008 Symrise AG 101
years commencing on or after July 1, 2009. Earlier application is
permissible. It is not expected that IFRIC 17 will have any impact
on the consolidated financial statements of Symrise AG.
2.3.Key Judgments and Estimates
The most important future assumptions and other significant
sources of uncertainty in estimates at the balance sheet date,
which may result in a significant risk that the carrying amounts of
assets and liabilities will require adjustment within the next fiscal
year, are discussed below.
Impairment of intangible assets with indefinite useful lives
At least once a year, the Group reviews whether intangible assets
with indefinite useful lives (mainly goodwill and certain recipes)
are impaired. This requires an estimate of the recoverable amounts
of the cash-generating units to which these assets are allocated.
In order to estimate the recoverable amount, the Group has to estimate
the expected future cash flows deriving from the cash-generating
unit and also to choose a suitable discount rate in order to
calculate the present value of these cash flows. As at December
31, 2008, the carrying amount of intangible assets with indefinite
useful lives was € 521.2 million (2007: € 486.2 million). More details
are provided in notes 8.10 and 8.11.
Recoverability of deferred tax assets
The Group makes an annual assessment as to whether tax loss
carry-forwards can be used to offset against future taxable profits
over a foreseeable period. This requires that the Group makes
an estimate of the taxable income for each Group company. As at
December 31, 2008, the carrying amount of the deferred tax assets
was € 44.6 million (2007: € 58.7 million). More details are
provided in note 8.7.
Pensions and other post-employment benefits
The expenses deriving from defined benefit pension plans and the
Group’s obligation to provide additional post-employment healthcare
benefits are determined on the basis of actuarial computations.
The actuarial valuation is made on the basis of assumptions
pertaining to discount rates, anticipated income from plan assets,
future wage and salary increases, mortality rates and future pension
increases. Due to the long-term nature of such plans, these
estimates are subject to great uncertainty. As at December 31,
2008, the provisions for retirement benefit and similar obligations
amounted to € 191.9 million (2007: € 186.3 million). Further details
are provided in note 8.19.
Notes