Values

96
Group Financial Statements
Notes
Customer-Specifi c Production Contracts
To the extent that they meet the requirements of IAS 11, customer-specifi
c contracts are reported using the percentage-ofcompletion
method.
In this method, revenues and gains on customer-specifi c
contracts are recognized on the basis of the stage of completion
of the respective project concerned. Th e percentage of comple-
Deferred Taxes
In accordance with IAS 12, deferred tax assets and liabilities
are recognized for temporary diff erences between the tax base
and the carrying amount shown on the IFRS consolidated balance
sheet, and for as yet unused tax loss carryforwards and tax
credits. Deferred tax assets are only reported in the amount in
Other Comprehensive Income
Th e other comprehensive income taken directly to equity in
accordance with IAS 39 includes foreign exchange gains and
losses as well as unrealized gains and losses from the fair value
measurement of available-for-sale securities and derivatives
used in cash fl ow hedges or hedges of net investments in
Provisions
Provisions for pensions and similar obligations are calculated
using the projected unit credit method within the meaning of
IAS 19. Th is method involves the use of biometric calculation
tables, current long-term market interest rates and current estimates
of future increases in salaries and pensions.
Th e interest portion of pension expense and the expected return
on plan assets are reported under net fi nancial expense.
tion is calculated as the ratio of the contract costs incurred up
to the end of the year to the total estimated project cost (costto-cost
method). Irrespective of the extent to which a project
has been completed, losses resulting from customer-specifi c
contracts are immediately recognized in full in the period in
which the loss is identifi ed.
which they can be subsequently utilized. Th e tax rates applied
for computation are those expected as of the date of reversal
of temporary diff erences and use of tax loss carryforwards, respectively.
foreign operations. Actuarial gains and losses under defi ned
benefi t pension plans are also taken directly to equity in full
in the year in which they arise in accordance with IAS 19.93A.
Deferred taxes on the aforementioned items are also recognized
directly in equity.
With the exception of the other personnel-related provisions
calculated according to IAS 19, all of the other provisions are
formed based on IAS 37 to the extent that there is a legal or
constructive obligation to a third party, the outfl ow of resources
is probable and it is possible to reliably determine the amount
of the obligation. Provisions are measured in the amount of
the most probable extent of the benefi t obligations. Long-term
provisions are discounted.
Bertelsmann Annual Report 2009