2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

Notes
following condition is fulfilled and a constructive
obligation is incurred:
A detailed formal plan containing at least the following
points exists:
– affected line of business
– main affected business locations
– location, function and approximate number of
employees
– arising expenditures
– time of implementation
– start of implementation before balance sheet
date or announcement of main features to those
affected
Restructuring provisions include only direct expenditures
caused by the restructuring, not costs associated
with the ongoing business activities.
Netting
Assets are only offset against liabilities in the balance
sheet if there is a legal basis for such netting and the
corresponding positions are intended to be closed
out at the same time through settlement.
Taxes and deferred taxes
Current taxes are calculated on the basis of the applicable
tax laws of the respective countries and recognized
as expense in the financial year in which
related profits arise. Liabilities related to current
taxes are recognized in the balance sheet as current
tax liabilities.
Deferred tax assets and deferred tax liabilities are
taken into account using the liability method for the
expected future tax consequences of all temporary
differences (timing differences) between the carrying
amounts of assets and liabilities and the corresponding
tax values.
Deferred tax assets arising from temporary differences
and from loss carryforwards eligible for offset
76 JULIUS BAER GROUP
are capitalized if it is likely that sufficient taxable
profits will be available against which those differences
or loss carryforwards can be offset.
Deferred tax assets and deferred tax liabilities are
calculated at tax rates expected to apply in the
period in which the tax assets will be realized, or the
tax liabilities settled. Current and deferred tax assets
and tax liabilities are offset against each other when
they refer to the same taxable entity, concern the same
tax authority, and an enforceable right to offset exists.
Current and deferred taxes are credited or charged
directly to shareholders’ equity if the taxes refer
to items that are immediately credited or charged
directly to shareholders’ equity in the same or a
different period.
Pension liabilities
In addition to the legally prescribed social security
plans, the Group maintains various defined contribution
and defined benefit pension plans in Switzerland
and abroad. The pension plans in Switzerland have
been set up on the basis of the Swiss method of
defined contributions but do not fulfill all the criteria
of a defined contribution pension plan according to
IAS 19. For this reason, the Swiss pension plans are
disclosed as defined benefit pension plans.
The pension obligations are largely covered through
pension plan assets of pension funds that are legally
separated and independent from the Group. These
are managed by a board of trustees consisting of
representatives of the employees and the employer.
The organization, management and financing of the
pension plans comply with the legal requirements,
the foundation charters and the applicable pension
regulations. Current employees and pensioners or
their survivors receive statutorily determined benefits
upon leaving the company or retiring as well as in the
event of death or invalidity. These benefits are
financed through employer contributions and
employee contributions.