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cost or net realizable value. Valuation adjust-
ments are made for obsolete materials and
excess stock.
Trade receivables
Trade receivables are classified as “loans and
receivables” and are stated at amortized cost,
which usually equals the original invoice value
less any impairment loss. The loss is measured
as the difference between the invoiced amount
and the expected payment. The allowances
are established based on maturity structure and
identifiable solvency risks.
Cash and cash equivalents
Cash and cash equivalents include bank accounts
and time deposits with original maturities
from the date of acquisition of up to three months.
Equity
Ordinary shares are classified as equity since
the shares are non-redeemable and any dividends
are discretionary.
When shares are repurchased, the amount
of the consideration paid is recognized as a
deduction from equity and presented as a sepa-
rate component in equity. When treasury shares
are sold or reissued subsequently, the amount
received is recognized as an increase in equity
and the resulting surplus or deficit on the
transaction is recognized in retained earnings.
Provisions
Provisions are recognized when the Group has
a present legal or constructive obligation as
a result of past events, it is probable that an out-
flow of resources will be required to settle the
obligation, and the amount can be reliably esti-
mated. Provisions are discounted if the impact
is significant.
Income taxes
Income taxes comprise both current and deferred
income taxes. Normally income taxes are recog-
nized in the income statement, unless they are
linked to a position that is recognized in other
comprehensive income. In this case, the income
taxes are also recognized in other comprehen-
sive income.
Current income taxes are calculated and
accrued on the basis of taxable income for the
year. Deferred income taxes on temporary
differences between carrying amounts of assets
and liabilities for financial reporting purposes
and amounts determined for local tax purposes
are calculated using the liability method. De-
ferred income taxes are measured at the tax rate
expected to be applied to temporary differences
when they reverse, using tax rates enacted
or substantially enacted at the reporting date.
Deferred income tax assets and liabilities
are offset to the extent that an entity has a legally
enforceable right to offset current income taxes,
and the deferred income taxes relate to income
taxes levied by the same taxation authority and
relate to the same taxable entity.
Temporary differences resulting from invest-
ments in Group companies are not considered
if Autoneum is able to control the timing of the
reversal of the temporary differences and if it
is probable that these temporary differences will
not reverse in future.
The tax impact of losses and deductible
temporary differences is capitalized to the
extent it appears probable that such losses will
be offset in the future by taxable income.
Employee benefits
Employee pension plans are operated by certain
subsidiaries, depending upon the level of cover-
age provided by the government pension facilities
in the various countries in which they are pres-
ent. Some are provided by independent pension
funds. If there is no independent pension fund,
the respective obligations are shown in the bal-
ance sheet under employee benefit liabilities.
As a rule, pensions are funded by employees’ and
employer’s contributions. Pension plans exist
70
Autoneum
Financial Report 2015
Consolidated financial statements