Nabaltec_E_GB2016

MAJOR ACCOUNTING POLICIES 77 4.14 TAXES Actual taxes on income Actual tax liabilities and refund claims for the current and all earlier periods are recognized in the amount of the expected payment to or refund from the tax authority. This amount is calculated based on the tax rates and laws in effect as of the reporting date. Deferred taxes Deferred tax assets and liabilities are recognized for all temporary differences between tax and IFRS measurement and for consolidation measures with effect on profit and loss using the balance sheet method in accordance with IAS 12, “Income taxes.” Pursuant to IAS 12.34, deferred tax assets for loss carry-forwards or temporary differences may only be recognized to the degree that it is likely that future taxable income will be earned so as to enable deduction of these loss carry-forwards. Deferred taxes are calculated based on the tax rates in effect at the time of realization, based on the current legal situation. Changes in tax rates are taken into account insofar as they can be expected with adequate certainty. Deferred tax assets and liabilities were netted out where possible. 4.15 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING INSTRUMENTS The Group uses derivative financial instruments to hedge against interest rate and currency risks arising from operations. Financial instruments are measured at fair value as of the reporting date. Changes in value are recognized at profit and loss unless the requirements for hedge accounting are met. Changes in the market value of derivative financial instruments subject to hedge accounting are recognized either in profit and loss (fair value hedge) or as a component of shareholders’ equity (cash flow hedge). Hedge accounting was applied in these two financial years for cash flow hedges relating to interest rate and currency risks. Derivative financial instruments which are not designated as hedging instruments are classified as financial assets held for trading if their fair value is positive and as liabilities if their fair value is nega- tive. Derivative financial instruments are measured at fair value. Changes in the fair value of these derivative financial instruments are recognized in profit and loss. 4.16 SHAREHOLDERS’ EQUITY Shareholder contributions and payments into the capital reserve are recognized, less transaction costs directly associated with the acquisition of shareholders’ equity, and with due regard for a possible tax effect. 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 Annual Report 2016 | Nabaltec AG ||||

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