Annual Report 2012 - Investor Relations

Notes to the consolidated financial statements55The assets and liabilities for deferred income taxes are recorded forthe effects under income tax law of all temporary differences arisingbetween the tax base of assets and liabilities and their carryingamounts for financial reporting purposes to the Group. Deferredincome taxes are determined using tax rates that apply, or havebeen announced, on the balance sheet date in the countries wherethe Group operates. Deferred tax assets from tax loss carryoversare recognised only when it appears highly probable that future taxableprofits will be available against which the tax loss carryoverscan be offset.Assets and liabilities from current and deferred income taxes areoffset against one other as long as the corresponding income taxesare levied by the same tax authority and a legally enforceable rightfor offsetting exists.1.17 ProvisionsProvisions are established when a legal or constructive obligationexists as a result of past events where the obligation will likely leadto a cash outflow and a reliable estimate of this outflow can bemade. The provisions established constitute the best possible estimateof the final obligation. Non-current provisions are discountedto their present value to the extent that their effects are material.Restructuring provisions are recorded if the Group has a detailedformal restructuring plan and the Board of Directors has made adecision to implement it. The breakdown into current and noncurrentprovisions is based on the assumption that their utilisationis probable within one year or later.1.18 Contingent liabilitiesPotential liabilities whose existence has yet to be confirmed byfuture events, or obligations whose amount cannot be reliably estimatedare disclosed as contingent liabilities in the Notes. Valuationis done on the basis of probability and the amount of the futureclaims and costs.1.19 Pension plan obligationsThe employee benefit obligations of the subsidiaries for retirement,death and disability are in accordance with statutory requirementsand provisions in the respective countries. The majority ofthe Group’s employees are covered by defined benefit or definedcontribution pension plans. The Swiss organisations of the Grouphave legally independent pension institutions that are financed byway of employer and employee contributions. Any actual economicimpact on the company exerted by pension funds is calculatedon the reporting date. Any economic benefit is capitalised providedthat this is used for the company’s future provident expenses. Aneconomic obligation is recognised as a liability where the requirementsfor creating a provision are satisfied. Where freely disposableemployer contribution reserves exist, they are recognised asan asset. The economic impacts of overfunding and underfundingin the pension funds on the Group and the change in any employercontribution reserves are recognised in personnel expense in additionto the contribution accrued to the period. The pension plan forthe subsidiaries in Italy are also valued as provisions or are treatedas a defined contribution plan.1.20 Treasury sharesTreasury shares are recognised as a reduction in shareholders’ equity.The purchase costs, proceeds from a resale and other movementsare presented as a change in shareholders’ equity. Treasuryshares are non-voting shares and are not entitled to dividends.1.21 Research and developmentResearch and development costs are recognised in full in income.These costs are contained in the “Marketing, sales, research anddevelopment expense” item.2. Changes in the scope of consolidationThe companies below were liquidated in 2012. The percentagesshown in brackets show the share voting rights in the company.– Cham Paper Group (Deutschland GmbH) Düsseldorf,Germany (100%)– Cham Paper Group (France) S.à.r.l., Paris, France (100%)– Cham Paper Group (UK) Ltd., Forest Row, UK (100%)