Edisun Power Europe Ltd. Corporate Governance Report 2010 ...

All amounts are in 000 CHF if not otherwise noted
2.9 Trade Receivables
Trade receivables, which generally have a 30-day term,
are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest
method (normally equivalent to the notional amount),
less provision for impairment. A provision for impairment
of trade receivables is established when there is objective
evidence that the Group will not be able to collect all
amounts due according to the original terms of receivables.
The amount of the provision is the difference between
the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the effective
interest rate. The amount of the provision is recognized
in the income statement.
2.10 Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits
held at call with banks, other short-term highly liquid
investments with original maturities of three months or
less, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities on the balance
sheet.
2.11 Share Capital
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from the
proceeds.
Where any Group company purchases the Company’s
equity share capital (treasury shares), the consideration
paid, including any directly attributable incremental
costs (net of income taxes), is deducted from equity
attributable to the Company’s equity holders until the
shares are cancelled or reissued.
Consolidated Financial Statements
2.12 Trade Payables and other Payables
Trade payables are recognized initially at fair value and
subsequently measured at amortized cost using the effective
interest method.
2.13 Borrowing
Borrowings (loans and straight bonds) are recognized initially
at fair value, net of transaction costs incurred. Borrowings
are subsequently stated at amortized cost; any
difference between the proceeds (net of transaction
costs) and the redemption value is recognized in the income
statement over the period of the borrowings using
the effective interest method.
Borrowings are classified as current liabilities unless
payments can be deferred for at least 12 months.
2.14 Current and Deferred Income Tax
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the Group’s
subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and
establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the consolidated financial statements. Deferred income
tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the balance-sheet
date and are expected to apply when the re-
35