english - About Heraeus
english - About Heraeus
english - About Heraeus
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10<br />
lead to a shift between two items in the income statement without any effect on income.<br />
In order to improve comparability, the following values were adjusted accordingly in the<br />
Group income statement: cost of materials (reduction of EUR 38.0 million), as well as other<br />
operating expenses (increase of EUR 38.0 million).<br />
Profits and losses from intercompany sales and services were eliminated. Due to their<br />
immateriality, intercompany profits of associated companies have not been eliminated.<br />
Intercompany receivables and liabilities have been offset.<br />
Income tax effects are taken into account and deferred taxes are recognized in the consolidation<br />
entries.<br />
Currency translation<br />
The financial statements of foreign subsidiaries prepared in foreign currency were translated<br />
using the modified closing rate method as defined in IAS 21, following the functional<br />
currency concept. As the subsidiaries are financially, economically, and organizationally<br />
independent, their functional currency is identical with the respective local currency. In<br />
the case of three foreign subsidiaries, the functional currency is the US dollar instead<br />
of the national currency.<br />
Income and expense items from statements prepared in foreign currency are translated<br />
at average rates for the year. Assets and liabilities are translated at closing rates and equity<br />
at historical rates. Any differences arising from the translation of equity are recognized<br />
directly in shareholders’ equity, as are exchange differences from translating items of the<br />
income statement.<br />
Exchange differences arising from debt consolidation were recognized as profit or loss and<br />
reported in the income statement as other operating income or expenses. Foreign currency<br />
receivables and liabilities in the separate financial statements of local subsidiaries are<br />
valued at the closing rate. Any unrealized exchange gains or losses are taken to the income<br />
statement.