ANNUAL REPORT 2004 - ELMOS Semiconductor AG

GROUP STATUS REPORT FINANCIAL STATEMENTS GROUP STRUCTURE GLOSSARY
Financial statements
ÿ Notes
Auditor’s certificate
Goodwill
Goodwill represents the excess of the purchase price of acquired companies over the
fair value of acquired assets and liabilities. It is not regularly written off but reviewed
annually or more frequently if impairment indicators arise, with regard to the neces-
sity of extraordinary depreciation. The company’s goodwill results from the acquisi-
tion of Silicon Microstructures, Inc. to an amount of 7,622,344 Euro.
In the fiscal year 2004 the remaining minority interest in ELMOS North America and
eurasem B.V. was acquired by the parent company. An increase of goodwill to an
amount of 692,055 Euro arises from these acquisitions.
Funding
ELMOS receives public funds used for the financing of research and development
projects as well as the acquisition of real estate and tangible assets. Funds are classi-
fied as other liabilities until utilized. Public funds used for research and development
projects are stated as other income (491,468 Euro in 2004 and 565,947 Euro in 2003),
while funds used for investments in property, plant and equipment are recorded by a
reduction of the purchase costs.
Share-based compensation
The company records compensation expense for its employee share-based compen-
sation plans using the intrinsic value method in accordance with Accounting Prin-
ciples Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB No. 25).
Under APB No. 25 generally no compensation expense is recognized if the exercise
price of share options equals or exceeds the estimated fair value of the underlying
shares on the date of grant.
Retirement obligations
There is a direct assurance to the Management Board members (benefit primacy)
stated under accrued liabilities in compliance with SFAS No. 87. “Projected benefit
obligation” and “accumulated benefit obligation” come to 2,212,928 Euro as of De-
cember 31, 2004 (12/31/2003: 1,536,650 Euro). “Prior service costs” no yet recorded
amount to 475,752 Euro (2003: 539,898 Euro). The “additional minimum liability” is
434,014 Euro as of balance-sheet date. The interest rate comes to five percent annu-
ally and the indexation of the pension is 1.5 percent annually. Length of employment
expenses as recorded in the income statement amounted to 83,804 Euro (2003:
93,263 Euro), interest expense was 76,833 Euro (2003: 86,732 Euro). Prior service costs
to be offset were entered to an amount of 64,146 in 2004 and 2003. As of December
31, 2004 there are actuarial gains of altogether 41,738 Euro not realized.
elmos annual report 2004
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