8 The exercise of judgement in applying the accounting policies

The preparation of IFRS-compliant consolidated financial statements requires the exercise of judgement by management. All estimates are reassessed on an ongoing basis and are based on historical experience and expectations with regard to future events that appear reasonable under the given circumstances. This applies to the following matters in particular:

In the case of certain contracts, a decision must be made whether they should be accounted for as derivatives or as executory contracts. Financial assets are classified under four categories, namely, held-to-maturity investments, loans and receivables, available-for-sale financial assets and financial assets at fair value through profit or loss. In measuring the provisions for pensions and other employee benefits, there are different options for recognising actuarial gains and losses. For this purpose, the Group applies the “corridor method” in accordance with IAS 19.92 (10% corridor). With respect to assets held for sale, it must be determined whether the assets are available for sale in their present condition and whether their sale is highly probable. If that is the case, the assets and the associated liabilities are reported and measured as assets held for sale and liabilities associated with assets held for sale.

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