Annual Report 2009 - Toyota Financial Services

Annual Report 20092. ACCOUNTING POLICIES (continue)h) Revenue recognitionSales are recognised upon the performance of services and are stated including discounts and net of the Value Added Tax.Lease income from the finance and operating leases is recognised evenly over the life of the relevant lease contracts. Incomeinterest on consumer loans is recorded on an accrual basis.Commission income for insurance intermediary services concluded as part of leasing contracts, consumer credit contracts orseparate contracts is recognized in the income statement over the duration of the contract on the maturity dates of the timelimitinsurance.i) Consumer creditsReceivables from consumer credits are stated at the nominal value less a provision for doubtful amounts.j) ProvisionsProvisions are recognised when the Company has a present obligation, it is probable that an outflow of resources will berequired to settle the obligation, and a reliable estimate of the amount can be made.k) Pension planThe Company does not operate any pension plan. Regular contributions are made to the state to fund the national pensionplan.l) Interest costsInterest costs on borrowings to finance the acquisition of tangible and intangible fixed assets are capitalised during the periodof completion and preparation of the asset for its intended use. Other borrowing costs are expensed.m) Deferred taxDeferred tax is recognised on all temporary differences between the carrying amount of an asset or liability in balance sheetand its tax base. Deferred tax assets are recognised if it is probable that sufficient future taxable profit will be available againstwhich the assets can be utilised.n) Recognition of revenues and expenses related to leasingIn accordance with the accounting principles valid in the Czech Republic, the leasing sales, depreciations, costs and insurancerevenues from the leased assets are shown within the operating result, while the interest costs for leasing assets financing areshown as part of the financial result. As the result of this, both operating and financial result do not reflect a mutual matchingof these revenues and costs.o) Related partiesThe Company’s related parties are considered to be the following:❍ Group companies;❍ Sole partner, of which the Company is a subsidiary or an associate, directly or indirectly, and subsidiaries and associates ofthe partner;❍ Members of the Company’s statutory and supervisory bodies and management and parties close to such members,including the subsidiaries and associates of the members and their close parties;❍ Companies with the same member of management.Material transactions and outstanding balances with related parties are disclosed in Notes 13 and 15.37