IMMOEAST Annual Report 2006/07

The provision is based on the best estimate at the time the financial statements are prepared. The best estimate of
the amount required to meet the present obligation is the amount the entity would rationally pay to settle the obligation
at the balance sheet date or to transfer the obligation to a third party at that time.
The risks and uncertainties that inevitably surround many events and circumstances must be taken into account in
determining the best estimate. The expected cash flows must be discounted to their present value if the time value
of money is material.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party,
the reimbursement may only be recognised when it is virtually certain that reimbursement will be received if the
entity settles the obligation. This reimbursement is to be treated as a separate asset. The amount recognised for the
reimbursement may not exceed the amount of the provision.
In the measurement of a provision, future events are to be included as follows:
• planning for reasonable changes in the use of existing technologies
• exclusion of possible gains expected from the disposal of assets
• inclusion of changes in law only when enactment is virtually certain.
Provisions must be reviewed as of each balance sheet date and adjusted through profit or loss if an outflow of
resources is no longer probable.
3.15 Contingent liabilities
Additional information on contingent liabilities is provided under point 4.14.
Contingent liabilities represent possible or existing obligations that arise from past events, in cases where it is not
probable that an outflow of resources will be required to settle the obligation. In accordance with IFRS 3, contingent
liabilities are only recorded on the balance sheet if they were obtained in connection with the acquisition of a company
and fair value at the point of acquisition can be measured with sufficient reliability. Subsequent measurement
is made through profit or loss at the higher of the expected value as determined under IAS 37 (see point 3.14) and
the value determined at the point of recognition – less accumulated amortisation in accordance with IAS 18.
3.16 Revenue recognition
Revenues are recognised when the risks and opportunities of ownership as well as control over the goods or services
are transferred to the buyer. In addition, it must be possible to reliably measure the revenues and the costs arising in
connection with the sale. If these criteria are met, revenues are recognised in the relevant period. If these criteria are
not met, any payments received must be treated as liabilities.
Notes
Revenues from the rental of property are recognised during the appropriate period determined by the rental agreement.
The sale of inventories is reported under revenues, with the transfer of ownership forming the point of realisation.
Report by the Executive Board 183
Highlights 2006/07
Business Model and Strategy
Portfolio Structure
Corporate Governance and Outlook
Property Portfolio
Development of Business
Consolidated Financial Statements
Service and Glossary
IAS 37.36
IAS 37.42
IAS 37.53
IAS 37.48
IAS 37.51
IAS 37.50
IAS 37.59
IAS 37.10 in
connection
with IFRS 3
IAS37.36fin
connection
with IAS 18
IAS 18.14
IAS 18.19