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

36 Consolidated Financial Statements
All amounts are in 000 CHF if not otherwise noted
lated deferred income tax asset is realized or the deferred
income tax liability is settled.
Deferred income tax assets are recognized to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference
is controlled by the Group and it is probable that
the temporary difference will not reverse in the foreseeable
future.
2.15 Employee Benefits
(a) Pension obligations
The Group has only employees in Switzerland under a
single plan. The plan is funded through payments to an
insurance company and classified as a defined benefit
plan. Typically defined benefit plans define the amount of
pension benefit that an employee will receive on retirement,
usually dependent on one or more factors such as
age, years of service and compensation.
The liability recognized in the balance sheet in respect of
defined benefit pension plans is the present value of the
defined benefit obligation at the balance-sheet date less
the fair value of plan assets, together with adjustments
for unrecognized past-service costs. The defined benefit
obligation is calculated by independent actuaries using
the projected unit credit method. The present value of the
defined benefit obligation is determined by discounting
the estimated future cash outflows using interest rates
of high-quality corporate bonds that are denominated in
the currency in which the benefits will be paid, and that
have terms to maturity approximate to the terms of the
related pension liability.
Actuarial gains and losses from experience adjustments
and changes in actuarial assumptions in excess of the
greater of 10% of the value of plan assets or 10% of the
defined benefit obligation are charged or credited to income
over the employees’ expected average remaining
working lives.
Past-service costs are recognized immediately in income,
unless the changes to the pension plan are conditional
on a given employees remaining in service for a specified
period of time (the vesting period). In this case, the pastservice
costs are amortized on a straight-line basis over
the vesting period.
(b) Bonus plans
The Group recognizes a liability and an expense for bonuses.
The Group recognizes a provision where contractually
obliged or where there is a past practice that has
created a constructive obligation.
2.16 Provisions
Provisions are recognized when the Group has a legal or
constructive obligation (e.g. dismantling cost for PV
plants) as a result of past events, when it is likely that an
outflow of resources will be required to settle the obligation,
and when a reliable estimate of the amount can be
made. The costs associated with the dismantling of PV
plants are capitalized in the carrying value of property,
plant and equipment and depreciated over the life of the
asset. The total provisions related to the PV plants, discounted
to present value, are recorded under long-term
provisions.
2.17 Revenue Recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in