Nabaltec_E_GB2016

78 MAJOR ACCOUNTING POLICIES 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 4.17 OTHER PROVISIONS Pursuant to IAS 37, “Provisions, contingent liabilities and contingent assets,” provisions are rec- ognized insofar as a present obligation towards third parties arises from a past event which is likely to result in a future payment and which can be reliably estimated. This means that the probability of occurrence must be higher than 50%. Provisions are recognized for identifiable risks and contingent liabilities in their probable amount and recourse claims are not taken into account. Non-current other provisions are discounted. The settlement amount includes cost increases as of the reporting date. Provisions were made for existing service anniversary bonus obligations established by works agreements using the same calculation assumptions as for pension reserves and pension-like liabilities. Service anniversary bonus obligations are calculated using the projected unit credit method. 4.18 PENSION RESERVES Pension reserves are calculated using the projected unit credit method in accordance with IAS 19. This method takes into account known pensions and vested rights as of the reporting date as well as expected future increases in pensions and salaries, based on a careful assess- ment of the relevant factors. The calculation is based on an actuarial opinion with biometric assumptions. The (net) interest component is determined at the start of the period by multiplying (net) pen- sion obligations, i.e. pension liabilities less plan assets, by the discount rate for measurement of the pension obligation. As a result, the interest expense resulting from the compounding of the obligation is netted out with the expected income from plan assets, with the result to be recognized as profit and loss. Expected income from plan assets is assumed to be in the amount of the discount rate. Like other actuarial gains and losses, deviations between the actual return on plan assets and/ or the actual discount rate as of the reporting date and the expected discount rate (= the ex- pected return on plan assets) are recognized in other comprehensive income as a remeasure- ment component. The discount rate for (net) pension obligations is determined based on the yields of high- quality fixed-interest corporate bonds. The service time component (service cost), which is to be recognized as profit and loss, includes both current service costs and past service costs arising from changes in the plan. 4.19 FINANCIAL LIABILITIES Financial liabilities in terms of IAS 39 are classified as “financial liabilities at fair value through profit and loss” or “other liabilities.” The Group classifies its financial liabilities upon initial recognition and reviews that classifica- tion at the end of each year, to the extent reasonable and permissible. |||| Nabaltec AG | Annual Report 2016

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