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