Annual report - Viscofan

VISCOFAN 2006 ANNUAL REPORTConsolidated Annual AccountsProvision is made under the assumption that these obligations will be cancelled:• Firstly, through emission rights transferred under a National Allocation Plan to the Company’s account in theNational Emission Rights Register, which are then used to cancel actual emissions in proportion to total forecastemissions for the entire period to which they have been allocated. The expense corresponding to this part of theobligation is determined based on the book value of the transferred emission rights.• Secondly, through the remaining emission rights recorded. The expense corresponding to this part of the obligationis stated at the average weighted cost of the emission rights.• If the emission of gases necessitates the acquisition or production of emission rights because actual emissionsexceed those which can be cancelled through the transfer of emission rights under a National Allocation Plan, orthrough surplus emission rights, whether acquired or produced, provision is made for the shortfall in rights. Theexpense is determined using the best estimate of the amount necessary to cover the shortfall in emission rights.4.19. Revenue recognitionRevenue comprises the fair value of the consideration received or receivable for the sale of goods and services, net of VAT andany other amounts or taxes which are effectively collected on the behalf of third parties. Volume or other types of discountsfor prompt payment are recorded as a reduction in revenues if considered probable at the time of revenue recognition.(a) Goods soldRevenues on the sale of goods are recognised when the following conditions have been satisfied:• the Group has transferred the significant risks and rewards of ownership of the goods to the buyer.• the Group retains neither continuing managerial involvement to the degree usually associated with ownership noreffective control over the goods sold;• the amount of revenue can be measured reliably;• it is probable that the economic benefits associated with the transaction will flow to the Group; and• the costs incurred or to be incurred in respect of the transaction can be measured reliably.(b) Services renderedWhen the outcome of a transaction involving the rendering of services can be estimated reliably revenues associated withthe transaction are recognised in the income statement by reference to the stage of completion of the transaction at thebalance sheet date.4.20. Income taxIncome tax on the profit for the year comprises current and deferred tax.Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the year.Current tax assets or liabilities are measured for amounts payable to or recoverable from tax authorities, using tax ratesenacted or substantively enacted at the balance sheet date.Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences,whereas deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporarydifferences, the carryforward of unused tax losses, and the carryforward of unused tax credits. Temporary differences aredifferences between the carrying amount of an asset or liability in the balance sheet and its tax base.92