consolidated financial statements - Lotus Bakeries

2.20 RevenuesRevenues are included in the income statementonce it is likely that the Group will reap economicadvantages from the transaction and therevenues can be reliably defined.Sale of goods and delivery of servicesTurnover is deemed to have been earned whenthe advantages and risks of the sale are payableby the purchaser and any uncertainty has beenremoved in terms of the collection of the agreedamount, transaction costs and any return of thegoods.Financial incomeFinancial income (interests, dividends, royalties,etc.) are considered to be realized once it is likelythat the company will reap the economicadvantages from the transaction and therevenues can be reliably defined.2.21 Income taxIncome tax in the results of the book yearincludes current and deferred taxes. Both taxesare recorded in the income statement except inrespect of items which have been directlyrecorded in equity. In such cases, the taxes aredirectly charged against equity.Current tax includes the amount of taxationpayable on the taxable earnings for the periodcalculated at the tax rate applicable on thereporting date. They also include adjustments offiscal liabilities for previous years.Deferred taxes are defined in accordance withthe balance sheet method and result mainly fromtemporary differences between the carryingamount of both assets and liabilities in theconsolidated balance sheet and their respectivetaxable base. Deferred tax is calculated using thetax rates and laws that are expected to be ineffect at the time such deferred taxes are realizedor the deferred tax liability is settled.Deferred taxes are recorded at their nominalvalue and are not discounted.Deferred tax assets from deductible temporarydifferences and unused tax loss carryforwardsare only recorded if it is probable that sufficienttaxable profits will be generated in the future andbe compensated by the deductible temporarydifference or unused tax losses.Deferred tax assets are reduced when it is nolonger probable that the related tax savings canbe generated. Unrecorded deferred tax assetsare re-assessed per balance sheet date andrecorded insofar as it is probable that there willbe fiscal profits in the future against which thedeferred tax asset can be deducted.2.22 Employee benefitsPension plansThere are a number of defined-contribution planswithin the Group. These pension plans are fundedby members of personnel and the employer andare recorded in the income statement of the yearto which they refer.In addition, there is also a defined benefit pensionplan in the subsidiary in Germany and theNetherlands.There are also provisions in some companies forearly retirement (Belgium) and pension obligationsarising from legal requirements (France).These are treated as employment benefits of thedefined benefit pension plans.For the defined benefit pension plans, provisionsare established by calculating the presentactuarial value of future amounts to the employeesconcerned.The amounts recorded in the income statementinclude the increase in the present value of thedefined pension rights, the interest cost, theexpected profits from the pension funds, theactuarial profits or losses and past service costs.The corridor approach is applied to these definedbenefit pension plans.n o t e s14