Annual Report 2005/06 THE WORLD OF SOUND - Sonova

9. Financial income/(expenses), net1,000 CHFGain on financial assets at fair value through profit or lossInterest incomeOther financial incomeTotal financial incomeMortgage interestOther interest expensesOther financial expensesChange in fair value of financial assets available for saleTotal financial expensesTotal financial income/(expenses), net2005/061,1664,368195,553(409)(604)(272)(1,285)4,2682004/054301,1901,9483,568(1,214)(1,968)(2)(1,209)(4,393)(825)Mortgage interest is mainly related to the mortgages on Phonak’s building in Stäfa, Switzerland. The interest rate on mortgages was between2.8% and 5.3% in 2005/06 (see Note 25). Other interest expenses are mainly related to bank loans (see Notes 23 and 26).The change in fair value of financial assets available for sale in the financial year 2004/05 is related to an adjustment of the fair value ofthree investments in third party companies (less than 20% of voting rights). These adjustments have been determined based on an analysis ofthe financial statements of the corresponding unquoted companies.In the financial year 2005/06, these investments have been designated as financial assets at fair value through profit or loss (in accordancewith revised IAS 39).10. Taxes1,000 CHFIncome taxesChange in deferred taxesTotal tax expenseReconciliation of tax expenseIncome before taxesWeighted average expected tax rateTax at weighted average rate+/- effects ofnon tax deductible expenses (income)utilization of previously unrecognized loss carryforwardschange in tax rates on deferred tax balancesprior-year expense and other itemsTotal tax expenseas a % of income before taxes2005/0643,06127043,331215,79620.0%43,2491,310228(920)(536)43,33120.1%2004/05 1)31,529(2,261)29,268125,12425.0%31,331(1,174)(1,345)(1,059)1,51529,26823.4%1)Including adjustments in accordance with new IFRS accounting standards (see Notes)62 Consolidated Financial Statements