Annual Report 2010 (PDF, 5.2MB) - Panalpina Annual Report 2012

Consolidated and Annual Financial Statements 2010
value of any related asset is deducted. The expected costs of these benefits are accrued over the period of employment using the same
method of valuation that is used for defined benefit pension plans. Any actuarial gains or losses which consist of differences between
assumptions and actual experiences and the effects of changes in actuarial assumptions are recognized in the income statement in the
period in which they arise.
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Share-based compensation
Certain employees of the Group participate in share-based compensation plans. The fair value of the employee services received in exchange
for the granting of the options and the discount on the shares granted is estimated at the grant date and recorded as an expense over
the vesting period. The expense is recognized as other employee benefits in the income statement within the operating result of “Corporate”.
For equity-settled plans, an increase in equity is recorded for this expense and any subsequent cash flows from exercises of vested
awards are recorded as changes in equity. For cash-settled plans, a liability is recorded, which is measured at fair value at each reporting
date with any movements in fair value being recorded in the income statement. Any subsequent cash flows from exercise of vested
awards are recorded as a reduction of the liability.
Other operating expenses
Other operating expenses primarily include administrative expenses, communication expenses, rent and utilities expenses, travel and
promotion expenses, insurance expenses and claims, changes in provisions from impairments of trade receivables and collection
expenses and other operating expenses necessary to render forwarding revenue to third parties. The expenses are recognized when
the expenses recorded on an accrual basis have been incurred.
Finance income and costs
Finance income comprises interest income on funds invested, dividend income, cash discounts, gains on disposals of available-for-sale
financial assets, changes in the fair value of financial assets at fair value through profit or loss, and gains on derivatives that are recognized
in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, cash discounts, changes in the fair
value of financial assets at fair value through profit or loss, impairment losses recognized on financial assets, losses on hedging instruments
that are recog nized in profit or loss, bank charges and bank guarantee fees. All borrowing costs are recognized in profit or loss using
the effective interest method.
Income tax expenses
Income taxes include all taxes based upon the taxable profits of the Group, including withholding taxes payable on the distribution of
retained earnings within the Group. Other taxes not based on income, such as capital taxes, are included within other operating expenses.
Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax assets and liabilities are recognized on temporary differences between the carrying amounts and the tax bases of
assets and liabilities for financial statement. Deferred income taxes assets relating to the carry-forward of unused tax losses are recognized
to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized.
Deferred income tax is not recognized for the initial recognition of assets and liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit nor loss, and differences relating to investments in subsidiaries and jointly controlled
entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred income tax is not recognized
for taxable temporary differences arising on the initial recognition of goodwill.
Deferred income tax assets and liabilities are offset when the income taxes are levied by the same taxation authority and when there is a
legally enforceable right to offset them. Deferred income tax is measured based on the currently enacted tax rates applicable in each tax
jurisdiction where the Group operates.
Current income tax and deferred income tax are recognized in profit or loss except to the extent that they relate to a business combination,
or items recognized directly in equity or in other comprehensive income.
Property, plant and equipment
Property, plant and equipment are measured at cost, net of accumulated depreciation and / or accumulated impairment losses, if any. Initially
property, plant and equipment are recorded at cost of purchase or construction and include all cost directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Interest and other
borrowing costs for long-term construction projects are capitalized and included in the carrying value of the assets. All other repair and
maintenance costs of the day-to-day servicing are recognized in the income statement as incurred. The present value of the expected cost
for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision
are met. When components of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items of property, plant and equipment.
Panalpina Annual Report 2010