Annual Report 2009 - Von Roll

Financial Reporting 2009 – Consolidated Financial Statements 49The policy described above is applied to all equity-settled share-based payments that were granted after November7, 2002 that vested after January 1, 2005. No amount has been recognised in the financial statements in respectof other equity-settled share-based payments.Financial liabilitiesFinancial liabilities are recognised initially at fair value, net of transaction costs incurred. Financial liabilities aresubsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemptionvalue is recognised in the income statement over the period of the liability using the effective interestmethod.All increases or decreases in financial liabilities are accounted for as of the trade date.ProvisionsProvisions for environmental restoration, contingencies and commitments, announced restructurings and legalclaims are only recognised if Von Roll has an existing legal or constructive obligation resulting from past events, ifit is more likely than not that an outflow of resources will be required to settle the obligation, or if the amount can bereliably estimated. Restructuring provisions comprise employee termination payments, lease termination penaltiesand other costs. Provisions are not recognised for future operating losses. The creation and dissolution ofrestructuring provisions is reported in other operating income.Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement isdetermined by considering the class of obligations as a whole.Other short-term liabilities and deferred incomeOther short-term liabilities comprise payables to social security institutions and other non-operating payables tothird parties due within one year. Furthermore, this item includes deferred income from customers and accruedexpenses to suppliers.Post-employment benefits, pension assets and liabilities(a) Pension obligationsVon Roll companies operate various pension schemes, some of which are managed by external parties. Von Rollhas both defined benefit and defined contribution plans. The defined benefit obligation is calculated annually byindependent, qualified actuaries using the projected unit credit method. This applies in particular for Swiss pensionplans.Current pension claims are recognised in the income statement in the period in which they accrue. Retrospectiveimprovements to benefits resulting from changes to plans are recognised on a straight-line basis over the averageperiod until they vest through profit or loss. If entitlements to pensions vest immediately, they are recognised in theincome statement immediately.Differences between the actual trends and anticipated trends lead to actuarial gains and losses. Applying the optionfor recognising actuarial gains and losses of this kind, Von Roll recognises them directly in equity in the othercomprehensive income. Since the deviations can be material, this can have a considerable effect on the Group’sequity.The recognised assets are determined in accordance with the interpretation IFRIC 14 “The Limit on a Defined BenefitAsset, Minimum Funding Requirements and their Interaction”.For defined contribution plans, Von Roll pays contributions to publicly or privately administered pension plans ona mandatory, contractual or voluntary basis. Von Roll has no further payment obligations once the contributions havebeen paid.(b) Other long-term employee benefits and post-employment obligationsSome Von Roll companies provide other long-term employee benefits or post-employment benefits. The entitlementto these benefits is usually dependent on years of service. The expected costs of these benefits are recognised inthe income statement in the period in which they arise and are also calculated for material plans using the projectedunit credit method in the same way as defined benefit plans. Changes in actuarial assumptions are immediatelyrecognised in the income statement. These obligations are valued annually by independent, qualified actuaries.