THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

tion results in a gain, any recognized asset is limited to the sum of
all accumulated unrecognized actuarial losses, past service costs
and the present value of any future refunds from the plan or reductions
in future contributions to the plan. Actuarial gains and
losses are recognized as income or expense, if the net amount of
the cumulative unrecognized actuarial gains and losses for each individual
plan at the end of the previous reporting period exceed
the higher amount of 10% of the defined benefit obligation or 10%
of the fair value of the plan assets at that date. The gains or losses
are allocated over the expected average remaining period of service
of the employees included in the plan.
The past service cost is recognized as an expense on a straightline
basis over the average period until the entitlement to the benefits
becomes vested. Inasmuch as the benefit entitlement
becomes vested upon introduction of, or at the time of changes to,
a pension plan, then the past service cost is recognized immediately
in profit or loss.
Gains deriving from an amendment to a plan in the US are recognized
on a straight-line basis over the average remaining period of
service of the employees benefiting from the plan.
The amount of the liability to be recognized deriving from a defined
benefit plan comprises the present value of the defined benefit
obligation plus or minus actuarial gains or losses after
deduction of prior service costs not yet recognized, plus any unrecognized
gains deriving from amendments to the plan and minus
the fair value of plan assets out of which obligations are to be settled
directly.
Any pension-related interest is disclosed as part of the financial result.
Provisions
A provision is recognized if the Group has a current (legal or constructive)
obligation as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made
of the amount of the obligation. Inasmuch as the Group expects that
some or all of the recognized provision will be reimbursed (e.g. from
an insurance contract), then the amount to be reimbursed is only
recognized as an asset if the reimbursement is virtually certain. The
expense relating to the provision is recognized in the income statement
after deducting the amount of any reimbursement. If the effect
of the time value of money is material, provisions are discounted
using a pre-tax discount rate that reflects current market expectations
as regards the effect of the time value of money and, where applicable,
the specific risks associated with the liability. Where
Annual Report 2008 Symrise AG 111
discounting takes place, the increase in the provision that results
from the passage of time is recognized as a finance expense.
Thus, the Group sets up provisions for probable and ongoing litigation
cases, if the risks can be reasonably estimated. In making the
determination, legal advisory fees and settlement costs are considered.
The probable amounts are determined for each individual litigation
case by reference to written documentation and cost
estimates for settlement of the litigation that are prepared by the
Group’s attorneys and provisions are set up accordingly. The provisions
are regularly reviewed for reasonableness and adjusted as
necessary.
Notes