PDF, 3.2 MB - Pfleiderer AG

Comprehensive Income
SFAS 130 (Reporting Comprehensive Income) requires companies applying it to report comprehensive
income and its components (net income after minority interests and other comprehensive
income) separately in the financial statements.
Other comprehensive income comprises income, expenses, gains and losses that are not included
in the group earnings.
Basic and Diluted Earnings per Share
Earnings per share (EPS) were calculated in accordance with SFAS 128 (Earnings per Share).
SFAS 128 requires all companies that have issued common stock to present earnings per share.
Basic earnings per share comprises net earnings (after taxes) divided by the weighted-average
number of common shares outstanding during the period. Common stock equivalents used for
stock option compensation can have a dilutive effect. If a dilutive effect occurs, the diluted
earnings per share must also be shown.
New Accounting Standards
Pfleiderer has applied SFAS 143 (Accounting for Asset Retirement Obligations) since January 1,
2003. This new statement regulates the financial accounting and reporting for obligations associated
with the closure or disposal of items of property, plant and equipment and the associated
retirement costs. It applies to legal obligations associated with closures or disposals of property,
plant and equipment that result from the acquisition, construction, development and/or the normal
operation of the asset. The liabilities are to be recognized at fair value in the period in which
the related payment obligations are incurred, if a reasonable estimate of fair value can be made.
At the same time, the carrying amount of the related asset is increased by the same amount.
This additional amount is amortized again over the remaining useful life of the items of property,
plant and equipment. The liability is adjusted at the end of each period to its current present
value, with an effect on income. Any positive or negative difference compared to its carrying
amount at the time of extinguishing the obligation is recognized as income or expense. Neither
the initial nor the subsequent application of SFAS 143 had any impact on the Company in 2004.
The FASB published Interpretation (FIN) 46, (Consolidation of Variable Interest Entities) in January
2003, and amended this once more in December 2003 as FIN 46, revised in December 2003.
FIN 46 (R) regulates the application of Accounting Research Bulletin (ARB) 51 for the consolidation
of certain entities (VIEs), in which it has a controlling financial interest through means other
than voting rights. FIN 46 (R) provides for the consolidation of a VIE by the primary beneficiary
and the disclosure of significant holdings in VIEs as the non-primary beneficiary. The Company
holds a controlling financial interest in a leasing object company that qualifies as a VIE. Please
refer for further details to VII. 2.
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