ANNUAL REPORT 2010/11 - Schumag AG

SCHUMAG AG 492.3.12 Taxes: Actual tax refund claims and taxliabilities for the current period and earlier periodsare assessed at the amount in which a refund fromthe tax office and/or a payment to the tax office isexpected. The calculation of actual taxes is effectedon the basis of the tax rates and tax laws effectiveas of the balance sheet date in those countrieswhere the Schumag Group earns taxable income.Deferred taxes are recorded for temporary differencesbetween the values assigned in the IFRS andtax balance sheet of the consolidated companiesand for consolidation processes and tax losscarryforwards. Deferred tax assets are set up in theamount of the expected tax burden and/or taxrelief of the subsequent fiscal years. The underlyingtax rates are indicated in Note 10. Deferred taxassets are only included when it is sufficientlyprobable that the tax reduction will be realized.Deferred tax assets and deferred tax liabilities areoffset if they relate to income taxes levied by thesame tax authority.2.3.13 Inventories: Inventories are carried atacquisition cost or production cost. If the marketprices and/or fair values based on the net realizablevalues are lower, these will be stated. The netrealizable value corresponds to the sales proceedsrealizable in normal transaction less costs to sellwhich can be directly allocated to the respectiveasset. Acquisition and production costs are determinedon the basis of the first-in-first-out method(Fifo). Production costs include, in addition todirect costs, an appropriate allocation of overheadcost of material and production using normal utilizationof the production plants provided that suchcosts are incurred in connection with the productionprocess. General administration costs are alsoincluded provided that they relate to the productionprocess. Financing costs are not included inproduction costs.as well as gains and losses from asset ceiling areset off as other results against retained earningswithout affecting income and are shown in theconsolidated statement of comprehensive incomeof the Group. Pension commitments in Germanyare determined with consideration of biometricaccounting principles according to the mortalitytables "Richttafeln 2005 G" published by KlausHeubeck.2.3.15 Other provisions: Other provisions areset up when there is a present obligation as aresult of a past event and when there is a probableoutflow of resources whose amount can be reliablyestimated. The amount of the provision is theprobable amount required to settle the obligation.Provisions are established for certain environmentalmeasures and risks if the measures are necessary asa result of current legal or regulatory obligationsand if the measures do not lead to the capitalizationof assets. The probable amount to settle long-termobligations is discounted if the effect of discountingis material. In this case, valuation of theprovision is done at present value. Interest effectsare shown in the financial result.2.3.14 Pension provisions: Pension provisionsare determined by means of actuarial calculationsbased on the projected unit credit method withconsideration of expected future compensationand pension adjustments. Actuarial gains or losses