Technologies · Systems · Solutions - Dürr

Cash and cash equivalents
Borrowing costs in connection
with the refinancing of
the Group
Provisions
Liabilities
Deferred taxes
Consolidated financial statements of Dürr AG
overdue, current business circumstances and past experience. Hedging against commercial
and political risks inherent in receivables is governed by guidelines and obtained by domestic or
foreign credit insurance coverage or via commercial banks.
All short-term liquid financial assets with an original term of up to three months are carried as
cash and cash equivalents at face value.
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Pursuant to IAS 23, borrowing costs incurred due to the issue of a bond are in deducted from the
bond in the consolidated balance sheet. Calculated using the effective interest method, borrowing
costs are amortized over the term of the bond.
Costs in connection with the syndicated loan are shown in the consolidated balance sheet as
other intangible assets and amortized over the term of the syndicated loan.
In accordance with IAS 19, provisions for pension obligations are measured using the projected
unit credit method. For this purpose, the future obligations are measured on the basis of the
pro rata employee benefit obligations as of the balance sheet date. Pension provisions are calcu-
lated taking into account development assumptions (e.g. salary developments) for those factors
which affect the benefit amount.
Dürr uses the 10% corridor rule to measure the pension obligations and determine the pension
expenses. Actuarial gains and losses are recorded as income or expense when they exceed 10%
of the present value of the obligations. The actuarial gains and losses that exceed this corridor
are amortized over the average remaining service period of the employees.
If pension obligations are reinsured with insurance firms, these reinsurance claims are netted
with the provisions and disclosed as plan assets if the criteria of IAS 19 are satisfied.
Other provisions are recorded if the obligation to a third party results from a past event which is
expected to lead to an outflow of economic benefits and can be reliably determined. They represent
uncertain obligations which are stated in the amount which, in the best possible estimate,
is necessary to cover them. Provisions with a residual term of more than one year are discounted
at market interest rates which reflect the risk and period until the obligation is met.
Liabilities from finance leases are carried at the present value of the lease payments or the lower
market value of the leased asset; the other liabilities are accounted for at amortized cost.
Deferred taxes are accounted for using the balance sheet-oriented liability method (IAS 12). This
involves creating deferred tax items for all temporary accounting and measurement differences
between IFRS and tax carrying amounts. Further, deferred tax assets for future economic bene-
fits from unused tax losses must be taken into account if it is highly probable that they will
be used. Deferred taxes are valued taking into account the respective national income tax rates
which apply in the individual countries at the time of realization or which are expected (basis:
applicable tax law).
Deferred tax assets and deferred tax liabilities are only netted if, and only if, the enterprise has
a legally enforceable right to set off current tax assets against current tax liabilities and the
deferred tax assets and the deferred tax liabilities relate to income taxes levied on the same
taxable entity by the same taxation authority.
Valuation allowances are only recorded on deferred tax assets if the loss of the tax benefit is
more probable than its use.