Corporate Magazine 2012 - Boehringer Ingelheim

Inventories are valued loss-free, i.e. discounts were recognised on the expected sales prices for costs yet tobe incurred.Receivables and other assets were recognised at cost less allowances for specific risks and general creditrisk. Low-interest or non-interest-bearing receivables with a term of more than one year were discounted.Securities classified as current assets include other securities and were recognised at the lower of cost orquoted/market prices on the reporting date.Cash and cash equivalents were recognised at the lower of cost or fair market value.Deferred charges and prepaid expenses in accordance with section 250 paragraph 1 HGB include expensespaid in advance for a certain period after the balance sheet date.Deferred charges in accordance with section 250 paragraph 2 HGB include proceeds, which are income fora certain period after the balance sheet date.2.3 Negative difference from acquisition of companiesThe negative difference from acquisition of companies was recognised as a result of the net assets of a companyacquired as of 31 March 2011 and 1 August 2012 exceeding the purchase price.The value of the negative difference from acquisition of companies amounting to EUR 157 million as of 1 Januarywas increased by the acquisition of a company acquired on 1 August 2012 amounting to EUR 11 million.The release of the negative difference from acquisition of companies of EUR 34 million to EUR 134 million isshown in other operating income. The amount of the release of the negative difference from acquisition ofcompanies is in line with the amortisation of the excess net assets as of the time of acquisition. The periodof amortisation is currently estimated at ten years.2.4 Group reservesGroup reserves include the retained earnings of the consolidated subsidiaries from prior years and consolidationentries that affect earnings related to prior years.2.5 ProvisionsTax provisions and other provisions include all uncertain liabilities and expected losses from executorycontracts. They were carried at the amount required to settle the obligation based on reasonable business judgementin accordance with the prudence principle (i.e. including future cost and price increases). Provisionswith a remaining term of more than one year are discounted using the matched-term, average market interestrate for the last seven years (in accordance with the Rückstellungsabzinsungsverordnung – GermanRegulation on the Discounting of Provisions).50Boehringer Ingelheim annual report 2012