ONE ROOF

The POC method is used primarily in the mainstream con-
struction business, construction management and contract
mining.
Deferred taxes arising from temporary differences between
the IFRS accounts and tax base of individual Group companies
or as a result of consolidation are recognized as separate
assets and liabilities. Deferred tax assets are also recognized
for tax refund entitlements resulting from the anticipated use
of existing tax loss carryforwards in subsequent fiscal years
provided it is sufficiently certain that they will be realized. Deferred
tax assets and liabilities are offset within each company
or group. Deferred taxes are measured on the basis of tax
rates applying or expected to apply in each country when they
are realized. For domestic operations, as in the prior year, a
tax rate of 31.5 percent is assumed taking account of corporate
income tax plus the German “solidarity surcharge” and
the average rate of municipal trade tax faced by Group companies.
For all other purposes, deferred taxes are measured
on the basis of the tax regulations in force or enacted at the
reporting date.
Inventories are initially stated at cost of purchase or produc-
tion. Production cost includes costs directly related to the
units of production plus an appropriate allocation of materials
and production overhead, including production-related depreciation
charges. Borrowing costs are included in cost. The
cost of materials and supplies is determined mainly using the
FIFO method and the moving average method. Inventories are
written down to net realizable value if their recoverable amount
is less than their carrying amount at the reporting date. If the
recoverable amount of inventories subsequently increases, the
resulting gain must be recognized. This is done by reducing
materials expense.
❘ Information for our Shareholders ❘ ❘ Management Report ❘ ❘ Financial Statements and Notes ❘
All marketable securities are classed as held for sale and
measured at fair value. They mainly comprise securities held
in special-purpose funds and fixed-income securities with a
residual term of more than three months and where there is no
intention to hold the securities to maturity. Initial measurement
is performed as of the settlement date and includes any transaction
costs directly attributable to the acquisition of the securities.
Unrealized gains or losses are reported in other comprehensive
income and are reversed to income or expense on
disposal. If there is objective evidence of impairment, the carrying
amount of a financial asset is reduced and the impairment
loss recognized as an expense. Such evidence includes
a significant or prolonged decline in fair value below cost.
Cash and cash equivalents consist of petty cash, cash bal-
ances at banks and marketable securities with maturities of no
more than three months at the time of acquisition.
Non-current assets held for sale and associated liabili-
ties are measured in accordance with IFRS 5. To be classed
as held for sale, assets must be available for immediate sale
and their sale must be highly probable. Assets held for sale can
be individual non-current assets, groups of assets held for
sale (disposal groups) or discontinued operations. Liabilities
that are disposed of with assets in a single transaction are
part of a disposal group or discontinued operation and are
separately reported as liabilities held for sale. Non-current
assets held for sale cease to be depreciated or amortized,
and are measured at their carrying amount or at fair value less
costs to sell, whichever is lower. Gains or losses arising on the
measurement of discontinued operations at fair value less
costs to sell, profits or losses of discontinued operations and
gains or losses on their disposal are reported under results of
discontinued operations. Gains or losses arising on the measurement
of individual assets held for sale or of disposal groups
are reported under results from continued operations until
their ultimate disposal.
Annual Report 2009 139