IC Companys – Annual Report 2008/09 0 - IC Companys A/S

The cost of finished products includes the cost of raw materials, consumables, external production costs and
costs to take delivery of the products, including transportation costs and quotas. The net realisable value of finished
products is determined as the expected selling price less costs incurred to execute the sale.
Receivables
Receivables are on initial recognition measured at fair value and subsequently at amortised cost, which usually
corresponds to the nominal value less provision for bad debts.
Prepayments
Prepayments recognised under assets comprise costs incurred relating to the following financial year, including
collection samples, rent, insurance, etc.
Dividends
Proposed dividends are recognised as a liability at the time of adoption by the shareholders at the annual general
meeting.
Treasury shares
The acquisition and sale of treasury shares and dividends thereon are taken directly to equity under the line item
“Retained earnings".
Pension obligations
The Group has entered into pension agreements and similar agreements with most of the Group’s employees.
Obligations relating to defined contribution plans are recognised in the income statement in the period in which
they are earned, and payments due are recognised in the balance sheet under other payables.
For defined benefit plans, annual actuarial calculations are made of the net present value of future benefits to be
paid under the plan. The net present value is calculated based on assumptions of the future developments of salary,
interest, inflation and mortality rates. The net present value is only calculated for those benefits earned by the
employees through their employment with the Group until the present. The actuarial calculation of the net present
value less the fair value of any assets related to the plan is included in the balance sheet as pension obligations.
See below, however.
Differences between the expected development of pension assets and liabilities and the realised values are
termed actuarial gains or losses. Subsequently, all actuarial gains or losses will be recognised in the income
statement.
If a pension plan represents a net asset, the asset is recognised only to the extent that it offsets future repayments
from plans, or it will reduce future payments to the plan.
Provisions
Provisions are recognised when, as a consequence of a past event during the financial year or previous years, the
Group has a legal or constructive obligation, and it is likely that settlement of the obligation will require an outflow
of the Company’s financial resources.
Provisions are measured as the best estimate of the costs required to settle the liabilities at the balance sheet
date. Provisions with an expected term of more than a year after the balance sheet date are measured at present
value.
In connection with a planned restructuring of the Group, provision is made only for liabilities relating to restructurings
that have been set out in a specific plan and where those affected have been informed of the overall plan.
Other financial liabilities
Other financial liabilities, including bank loans and trade payables, are on initial recognition measured at fair
value. In subsequent periods, financial liabilities are measured at amortised cost, applying the effective interest
method, to the effect that the difference between the proceeds and the nominal value is recognised in the income
statement as financial expenses over the term of the loan.
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