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mated. Provisions are discounted if the impact
is significant.
1.16 Income taxes
Income taxes comprise both current and de-
ferred income taxes. Normally income taxes are
recognized in the income statement, unless
they are linked to a position that is recognized
directly in equity or in other comprehensive
income. In this case, the income taxes are also
recognized directly in equity or in other com
prehensive 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.
1.17 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
balance sheet under employee benefit liabilities.
As a rule, pensions are funded by employees’ and
employer’s contributions. Pension plans exist
on the basis of both defined contribution and
defined benefit.
Pension liabilities arising from defined
benefit plans are calculated annually by inde-
pendent actuaries using the projected unit
credit method. The discount rate used for the
calculation is based on interest rates of
high-quality corporate bonds that are denomi-
nated in the currency in which the benefits
will be paid, and that have terms to maturity
approximating to the terms of the related
pension obligation. Remeasurement gains or
losses are recognized in other comprehensive
income. Pension costs relating to services
rendered in the reporting period are recognized
in the income statement as current service
costs. Pension costs relating to services rendered
in previous periods as a result of new or amend-
ed pension benefits are recognized in the
income statement as past service costs. The
net interest expenses or income on the net
defined benefit liability or asset for the period is
determined by applying the discount rate used
to measure the defined benefit obligation at the
beginning of the period to the then net defined
benefit liability or asset, taking into account any
changes in the net defined benefit liability
(asset) during the period as a result of contribu-
tions and benefit payments. The net interest
expenses or income is recognized in financial
expenses or income. The fair value of plan
assets is deducted from the defined benefit
75
Autoneum
Financial Report 2016
Consolidated Financial Statements