ANNUAL REPORT 2006 - Triplan AG

Consolidated Notes 41
Other short-term provisions
A provision is only reported if the company faces a current (statutory or factual) obligation due to a past event,
it is likely that fulfilling that obligation will result in an outflow of resources and the amount of the obligation
can be reliably calculated. Provisions are reviewed at each reporting date and adjusted in line with the best
estimate at the time. If a significant interest-rate effect results from the date on which a commitment is met,
the provision is included in the balance sheet at its present value. To the extent that no reliable estimate can
be made in individual cases, no provision is made but a contingent liability is stated.
Liabilities
After being reported for the first time, all financial liabilities that are not derivative liabilities are measured at
amortized historical costs. Once they have been reported for the first time, derivative liabilities are measured
at their current market value.
Realization of revenues
Revenues are recorded if it is likely that the economic benefit associated with the corresponding transaction
will be passed to the company in receipt of the service and if the amount of the revenues can be reliably
measured. Sales revenues are recorded minus general sales tax and any price reductions/volume discounts
provided that the delivery has been made and economic ownership together with the related risks and rewards
has been transferred.
Revenue from long-term orders is reported in accordance with IAS 18 Revenue or IAS 11 Construction Contracts
according to the project’s effective progress (“percentage of completion method”, PoC). Gains from the PoC
method are only recognized when the result of a production order can be reliably predicted. Since the results
of production orders cannot be reliably predicted, revenues are reported in the amount of the expenses incurred
(zero profit method).
Interest
Interest is recorded in line with the effective interest received on assets.
Foreign currencies
Foreign currency transactions are recorded in the reporting currency by translating the foreign currency amount
on the basis of the exchange rate between the reporting and foreign currency at the time of the transaction.
Translation differences from the settlement of monetary items at rates that differ from the rate originally
recorded during the period are charged to expenses or income for the period in which they occur.
Foreign commercial operations
The subsidiaries in the group of consolidated companies are independent financially, economically and
organizationally. They are therefore viewed as economically independent foreign units. Their reporting currency
in each case is their national currency. The balance sheets prepared by the consolidated foreign holdings are
translated using the year-end exchange rate; the income statements are translated using the average rate for
the financial year. All resulting translation differences are included in the accumulated exchange rate differences
within shareholders’ equity.
Borrowing costs
Borrowing costs are not capitalized but expensed in the period in which they are incurred. The interest rate risk
based on the short-term loan liabilities in the Group and an interest rate change of +/– 1% is approximately
¤ 1,000. Long-term loan liabilities have fixed interest rates.