Annual Report 2006 ISS Global A/S

NOTES TO THE FINANCIAL STATEMENTS OF THE PARENT COMPANY
1 January - 31 December
1. Significant accounting policies (continued)
Other expenses comprises of expenses, both recurring and non-recurring, that ISS Global A/S does not consider to be normal
ordinary operations.
Income from subsidiaries and joint ventures comprises dividends declared in the year and gains and losses from divestment
of subsidiaries and joint ventures. If dividends declared exceed the accumulated profit since take-over, the dividend is not
recognised in the income statement but instead recognised as a write-down in the cost of the investment.
Net finance costs comprises interest payable on borrowings calculated using the effective interest rate method, interest
receivable on funds invested and foreign exchange gains and losses.
Income taxes consists of income tax and changes in deferred tax. Deferred tax is recognised based on the balance sheet
liability method and comprises all temporary differences between accounting and tax values of assets and liabilities.
Where the tax base can be calculated using different tax regulations, deferred tax is measured based on the planned use of the
asset or the unwinding of the liability, as applicable.
Deferred tax is computed based on the tax rate expected to apply when the temporary differences are balanced out. No deferred
tax provisions are made for undistributed profits of subsidiaries and goodwill not deductible for tax purposes. Deferred tax assets,
including the tax value of losses carried forward, are recognised at the value at which they are expected to be applied either by
eliminating tax on future earnings or by setting off deferred tax liabilities within the same legal tax unit and jurisdiction.
The recognised income tax is allocated to Income taxes and Equity, as applicable.
ISS Global A/S is jointly taxed with all Danish resident affiliates. The Danish income tax payable is allocated between the jointly
taxed Danish companies based on their proportion of taxable income (full absorption including reimbursement of tax deficits).
The jointly taxed companies are included in the Danish tax on account scheme. Additions, deductions and allowances are
recognised under Net finance costs.
CASH FLOW STATEMENT
The cash flow statement shows ISS Global A/S's cash flows for the period stemming from operating, investing and financing
activities, the change in cash position during the period as well as ISS Global A/S's cash position at the beginning and the end of
the period.
The cash flow statement is prepared using the indirect method based on Operating profit before other items.
Cash flow from operating activities comprises Operating profit before other items adjusted for non-cash items, changes in
working capital, income taxes and other income and expenses.
Cash flow from investing activities comprises investments in or sale of subsidiaries and joint ventures and cash flow from
purchase and sale of non-current assets.
Cash flow from financing activities comprises proceeds from and repayment of loans, payments regarding interest, dividends
and proceeds from share issues.
Cash and cash equivalents comprises cash and marketable securities, with maturity of less than three months that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
BALANCE SHEET
Financial assets Investments in subsidiaries and joint ventures are recognised at cost. Investments are written down to the
recoverable amount if this is exceeded by the cost. Cost is written down to the extent that the dividends declared exceeds the
accumulated profit since take-over.
Receivables are measured at amortised cost less a provision for doubtful debts based on an individual assessment. Provisions
and realised losses during the year are recognised under Other operating expenses.
Securities are measured at fair value at the balance sheet date, with any resulting gains or losses recognised in the income
statement. The fair value is the quoted bid price at the balance sheet date.
Dividends are recognised in the period in which they are declared.
Continues
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ANNUAL REPORT 2006 / Parent Company Financial Statements
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