Nabaltec_E_GB2016

S T N E M E T A T S L A I C N A N I F D E T A D I L O S N O C 72 USE OF ASSUMPTIONS AND ESTIMATES/ MAJOR ACCOUNTING POLICIES the case, the deferred tax assets are not used and are therefore not recognized. Deferred tax assets as of 31 December 2016 (prior to netting out with deferred tax liabilities) amounted to EUR 9,437 thousand (year before: EUR 7,382 thousand). ■ ■ Impairment of non-financial assets: impairment tests of other intangible assets and property, plant and equipment are generally based on the estimated future discounted net cash flows which are to be expected from continued use of the asset and from disposal of the asset at the end of its useful life. Factors such as diminished revenues, resulting in lower net cash flows, as well as changes in discounting factors, may result in impairment or a write-up, if permissible. Shares in a controlled company: the Group is invested in a joint venture with a direct owner- ship interest of 51.00% (year before: 51.00%). Given the totality of the legal and economic circumstances, Nabaltec AG has the power to govern the company’s financial and operating policies so as to obtain benefits from its activities. Accordingly, the controlled company is included in the consolidated financial statements as a fully consolidated subsidiary. Actual results in future periods may deviate from estimates. If better information becomes avail- able, changes are made with effect on profit and loss. 4. MAJOR ACCOUNTING POLICIES REVENUE REALIZATION 4.1 Revenues from the sale of goods are recognized in accordance with the criteria established in IAS 18 in cases where risks and opportunities have been transferred entirely to the buyer, a price has been agreed upon or can be determined, and it can be expected that the price will be paid. Revenues are diminished by cost of sales and discounts. 4.2 REALIZATION OF EXPENSES Expenses are recognized on an accrual basis. Operating expenses are recognized in profit and loss at the time of their accrual, or at the time the service is utilized. 4.3 RESEARCH AND DEVELOPMENT COSTS Nabaltec AG invests part of its financial resources in research and development performances. In addition to internal development activities relating to the individual optimization of purchased software, this particularly includes research and development activities for the improvement of existing products and processes and the development of new products and processes. Research costs are recognized as expenses in the period in which they accrued. The Group only recognizes development costs in connection with individual projects as intangible assets if it can demonstrate the technical feasibility that the asset will be completed so that it will be available for internal use or sale, as well as its intention to complete the asset and use or sell it. The Group must also show that the asset will generate a future economic benefit, the availability of resources to complete the asset and the ability to reliably determine the expenses attributable to the asset during its development. Following the first-time recognition of development costs, the cost model is applied, i.e. the asset is recognized at cost less accrued depreciation and impairment costs. Costs include directly |||| Nabaltec AG | Annual Report 2016

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