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MANUAL
IFRS GROUP ACCOUNTING GUIDE-
LINES
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 2 of 221
1.1 Introduction
On the basis of the directive (EC) No. 1606/2002 of July 19th 2002, KWS SAAT AG (here-
inafter referred to as KWS or KWS AG) must compile a consolidated KWS FINANCIAL
STATEMENT according to “international accounting standards”. In terms of this direc-
tive, the “International Accounting Standards“ (IAS), the “International Financial Reporting
Standards“ (IFRS) and interpretations connected therewith (SIC/IFRIC-interpretations), later
alterations of these standards and interpretations connected therewith as well as future stan-
dards and interpretations connected therewith, which have been issued or accepted by the In-
ternational Accounting Standard Board (IASB) are termed international accounting stan-
dards.
Basically all national and foreign subsidiaries must be included in a consolidated financial
statement. IAS 27.13 regulates exceptions for exclusion. The general principle of essential-
ity applies to subsidiaries of subordinate significance. The reasons for non-inclusion of a
subsidiary must be stated.
Form, content, publication periods to be adhered to, auditing and diverse other demands on
the KWS consolidated financial statement are regulated in the IAS and in national regula-
tions such as e.g. the “German Code of Corporate Governance“, the Companies Act and the
like.
As a basic principle, accounting and valuation must take place uniformly throughout the
group. Congenial issues must be handled according to the same method.
The KWS-GROUP accounting language is ENGLISH, with the exception of the German-
speaking countries, where the KWS-GROUP accounting language is GERMAN.
The reporting currency for the consolidated financial statement is EURO (€). For the sake of
clarity, the amounts must be rounded off to THAUSEND EURO (T€ = 1000 €).
The entities inform only in local currency ( for simplification in 1000 local currency with
point two)
Currency conversion of the subsidiaries and associated companies accounting in foreign cur-
rency takes place according to IAS 21, particularly IAS 21.30 ff. IAS 29 must be applied in
high-inflation countries.
The deadlines for the KWS consolidated financial statements arise from the legal require-
ment for publication of the COMPANY REPORT of KWS SAAT AG and the KWS Group.
In order to safeguard the adherence to legally predetermined deadlines for publication of the
consolidated financial statement, it is compulsory to observe the deadlines for submission of
the group annual accounting documents set by the group management.
Last deadline for calculation of benefits and billing for services between subsidiaries and as-
sociated companies:
Calculation of benefits (e.g. calculation of cultivation costs, interest calculation) must take
place at least semi-annually for the periods July 1st to December 31st and January 1st to
June 30th. Accounting for the second half of the year (January to June) must take place by
July 15th at the very latest.
The accounts receivable and accounts payable, revenue and expenditure resulting from the
intra-group business relations (deliveries, cultivation, credits etc.) must be concerted among
the respective subsidiaries and associate companies by July 25th at the very latest.
In accordance with IAS 27.19, companies contained in the KWS scope of consolidation,
whose financial year ends on 31.12, are obliged to draw up an IAS-interim report by the
group accounting date (30.06).
times. Of course you may also contact the head of the financial management department,
Mr Steffen Heise or Mr Wolfgang Hessel (manager financial accounting).
The representatives of the subsidiaries and associate companies are obliged to provide the
persons in charge at KWS AG, the gentlemen
S. Heise
W. Hessel
H.-J. Diedrich
with all information required for the KWS CONSOLIDATED FINANCIAL STATEMENT.
Moreover, they are obliged to cooperate with the respective representatives of other subsidi-
aries and associate companies as regards coordination of accounts receivable, accounts pay-
able, revenue and expenditure from business connections between subsidiaries and associate
companies.
As per April, 30 of every year, all subsidiaries and affiliated companies are bound to inform
Mr. Matthias Siewert – Group Accounting, which auditing firm will perform the year-end
audit.
E-mail: m.siewert@kws.com
Fax: +49 5561 311 417
Phone: +49 5561 311 644
The representatives of subsidiaries and associate companies are also obliged to provide the
representatives of the accounting firm examining the KWS CONSOLIDATED FINANCIAL
STATEMENT,
D-30159 Hanover,
with all information required for the KWS CONSOLIDATED FINANCIAL STATEMENT.
The representatives of the quarterinformation and budget (one year and midterm budget) in
the controlling department are:
KWS SAAT AG
KWS Reporting Activities are organised in accordance with the key business activities
under reporting by segment and are divided into three product segments - sugar beet,
sweet corn and cereals - plus the segment propagation & services. Propagation services
are charged to the respective product segments at licence fees, as customary in that par-
ticular market. Furthermore, holding and administration costs are charged to the product
segments. Oil and field seed activities are included in the segments sweet corn and cere-
als, as per their respective allocation under company law.
In addition to that, internal divisional reporting is performed for the divisions sugar
beets, corn and cereals, as well as cross-product service activities. Within divisional re-
porting, the functions Production, Research & Development, Marketing and Administra-
tion are allocated to the individual, specific divisions. Oil and field seed activities are also
included in the divisions sweet corn and cereals, as per their respective allocation under
company law.
The goal of the internal divisional profit and loss statement is a product-oriented assess-
ment of activities, taking all functions (including R&D) into account, whereas the goal of
external reporting by segments is the assessment of activities in consideration of market
risks.
Segment definitions:
The segment sugar beets (ZR) contains reports on propagation, processing, marketing
and administration activities for sugar beet seeds (R&D activities ZR are allocated to the
segment propagation & service).
The segment corn (MA) contains reports on the propagation, processing, marketing and
administration activities for grain and silo corn as well as oil and field seeds (R&D activi-
ties MA are allocated to the propagation & service segment).
The segment cereals (GT) contains reports on the propagation, processing, marketing
and administration activities for hybrid rye, wheat and barley as well as oil and field
seeds (R&D activities GT are allocated to the propagation & service segment).
The segment Research & Services (Z&D) includes summaries of the Research & De-
velopment activities as well as central group functions (board of directors, company co-
ordination, cross-divisional research & development) service functions (logistics, infor-
matics, finance, personnel, purchasing/engineering, etc.), the potato activities (multiplica-
tion, production and selling of potato seed stock including administrative activities) and
agricultural activities of KWS.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 12 of 221
Definition of divisions:
The Services Division (DL) includes summaries of central group functions (board of di-
rectors, company coordination, cross-divisional research & development) central service
functions (logistics, informatics, finance, personnel, purchasing/engineering, etc.), the po-
tato activities (research and breeding, multiplication, production and selling of potato
seed stock including administrative activities) as well as agricultural activities of KWS.
R&D oil/field seed (MA-FE-OF): Research and development of oil and field seed
Rape segment corn (MA-RA): Distribution/production of rape seed in the segment corn 2)
R&D rape segment corn: (MA-RA-FE): Research and development of rape seed
R&D rape segment cereals: (GT-RA-FE): Research and development of rape seed
Central R&D functions (CF-FE): Central R&D activities (cannot be allocated to the
products)
1) only applicable to the sweet corn division/segment; no separation for cereals, because
no profit centre has been defined; P&L only up to Contribution Margin 1 (Sales and Cost
of Sales; no figures in the balance sheet -> figures were shown under Corn (MA-MA).
2) Definition rape: Winter and summer rape. P&L disclosure only until contribution
margin 1 (sales and COS). No balance sheet items -> Data are shown among corn (MA-
MA) respectively cereals (GT-GT).
In accordance with internal regional control, European countries are allocated to the fol-
lowing regions: Germany, France, Central Europe, Northern Europe, Southern Europe,
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 14 of 221
South-East Europe, Eastern Europe. Apart from that, the additional regions of Northern
America, Central/South America, Africa, Middle East and East Asia have been defined
for the purpose of determining overall data.
For external reporting, these regions are combined in the following groups of regions:
Germany, Europe, America, other countries.
The following overview illustrates the allocation of countries, regions and groups of re-
gions:
All further not specified countries are seized under a respective land's group
( for example "Other countries Northern Europe").
Forecast reporting
In the course of business, annual planning is compared to current forecasts. In this con-
text, planning is updated on the basis of latest findings on the development of the busi-
ness. The forecasts show the anticipated actual result as per June 30 and are updated on
a quarterly basis:
KWS-plans are compiled during the period from March to June. In addition to annual
planning, plans for three additional business years are compiled within the framework of
medium term planning.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 16 of 221
The data for the reports listed in 1.4.3 are entered into a centralised data entry tool
(DET). Data acquisition is performed on different levels, which are controlled via ver-
sions and periods:
ACTUAL company: Version 100
ACTUAL profit centre division: Version 200
Profit centre, segment: Version 203
Forecast profit centre, division: Version 300
Forecast profit centre, segment: Version 303
Planning, division: Version 400
Planning, segment: Version 403
Data entry is performed in the versions 100, 200, 300 and 400. The versions 203, 303,
403 are derived from the versions above, by means of modified allocations.
Regarding the respective reports, the following information is required for data entry in
the DET, in addition to the business year:
The entry of submitted dated is performed on company and/or profit centre level.
- Partner information: Indicate “of the company” when relationships between associated
companies included in the scope of consolidation are concerned, or “external third par-
ties” when relationships outside the scope of consolidation are concerned.
- Country or region: to be entered depending on version, profit centre and item line
(identified for each item line below)
- Break-down information/duration: to be entered depending on version and item line
(identified for each item line below)
- company level
- Profit-Center level
The balance sheet for Profit-Center only includes reports on items which can be allo-
cated as follows:
Assets: Intangible assets, tangible assets, biological assets, stocks, trade accounts receiv-
able.
Liabilities: Liabilities from deliveries and services, short- and long-term provision for
pensions and similar obligations, reorganisations and other reserves.
If, for example, an asset is used by several profit centres, is has to be allocated to that
profit centre which utilises it predominantly.
Profit and loss statement (refer to item plan - outline point 6.1.2).
There are two outline schemes for the profit and loss statement:
which are coordinated with each other. The difference lies in the allocation of items.
(e.g. R&D costs are shown as a separate function in the internal scheme; under manufac-
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 18 of 221
turing costs within the external scheme). Data entry in the centralised entry tool (DET) is
performed exclusively within the internal classification scheme.
For the gross value method the acquisition or manufacturing costs and the depreciation (the
total amounts) have to be shown in total amounts (cumulative). The residual book value is
the result of cumulative acquisition or manufacturing costs, additions/disposals of the cur-
rent year less cumulative depreciation and addition/disposals of depreciation of the current
year.
For the opening balance only the sub-items 100 and 150 have to be used.
Example for the opening balance as per June 30th, 2005 and following
Acq. costs addition disposal Write-ups Deprec. cur- Deprec. Residual
cumula- rent year cumula- book
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 19 of 221
For all opening balances prepared later than June 30th, 2003, the sub-items from 1.4.6.2.1
have to be used except for the sub items for group purposes. The cumulative acquisition or
manufacturing costs and cumulative depreciation will be transfered by the system in the next
periode. The balance carried forward takes always place only on the 1st of July of the follow-
ing fiscal year. The current movements have to be shown in the quarter, half year and the
year-end statement.
For reasons of simplification the changes have to be shown only on net amounts.
The net value method has to be used in version 200, 300 and 400.
Example for the opening balance as per June 30th, 2005 and following.
Acq. addition disposal Write-ups Deprec. cur- Deprec. Residual
costs cu- rent year cumula- book
mulative tive value
900,00 100,00 1.000,00
The addition of 100,00 consists of an addition of 200,00 , a write-up of 50,00 and deprecia-
tions of 150,00 in 2004/05.
only on the 1st of July of the following fiscal year. The current movements have to be shown
in the quarter, half year and the year-end statement.
For data entry of fixed assets the gross value method has to be used with the following sub-
items.
If a specification for partner units has to be required (e.g. financial assets) the respective
company (not a profit center) has to be selected.
Subitem 145 has to be used exclusively for write-ups of financial assets (e.g. appreciation
value because of an increase of stock market price). If the reason for the depreciation is not
to apply, the financial asset has to be write-up.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 22 of 221
1.4.6.2.2.1 Stocks
Stocks of finished goods which following from deliveries by subsidiaries and jount ventures
have to be entered with a partner unit (company). If the delivery of stocks contains an inter-
company profit the additional data have to be completed from both companies (supplier and
receiver). The supplying company (normally the division controlling) has to inform the re-
ceiving company if an intercompany profit has to be eliminated.
Receivables have to be divided into receivables with subsidiaries, joint ventures, associated
companies and third parties. Under point 1.7.2. of the guideline the companies are deter-
mined into subsidiaries, joint ventures and associated companies. This structur is obliga-
tory.
The receivables have to be entered according to their term. For this purpose the following
sub-items have to be used:
Sub-item Term
200 Term until one year
210 Term longer than one year
By entry receivables with subsidiaries, joint ventures and associated companies the partner
unit (company) has to be specified.
Deferred tax assets have to be entered considering the structure (per item of the balance
sheet). For this purposes the following movement types have to be used.
Reorganizations into revenue reserves or out of revenue reserves into other equity positions
are displayed for the consequential consolidation with flow types 610 and 615.
The capital reduction and increase of the subscribed capital and capital reserves are dis-
played with flow types 630 and 635.
Flow types 620 and 625 have to be used for facts of the subsequent consolidation (e.g. in-
crease of other revenue reserves from net income for the year, changes in OCI) as well as for
special facts.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 24 of 221
Die Bewegungsarten 620 und 625 werden sowohl für Sachverhalte der Folgekonsolidierung
(z.B. Erhöhung der anderen Gewinnrücklagen aus dem Jahresüberschuss, Veränderung des
OCI) als auch für spezielle Sachverhalte verwendet.
These include:
- mergers
- full or partial rebookings (companies are reallocated)
- liquidations
- full and partial asset retirements.
The subitems 650 and 655 have to be used for hyper inflation adjustments and apply pres-
ently at KWS group only for Turkey and Romania. Due to a modified economic situation in
a country reasons can argue for the existence of hyper inflation. In a hyper inflation country
reporting is not convenient without adjustments, because of huge depreciation the compari-
son of figures is misleading. The IAS do not determine an absolute limit for the existence of
hyper inflation. However IAS 29.3 gives clues when a hyper inflation country is assumed.
These clues have to be checked stringently by the assumption of hyper inflation. The equity
with its subitems 650 and 655 is the offsetting entry on the liabilities side of the balance
sheet for adjustments owing to the influence of inflation in the assets (e.g. adjustments in
fixed assets).
Liabilities are to be classified by subsidiary, joint venture, associated enterprise and foreign
third party. On page 43 and the following is the guideline laid down that determines which
companies are subsidiaries, joint ventures and associated enterprises. This classification is
binding.
When entering liabilities with subsidiaries, joint ventures and associated enterprises, the re-
spective partner unit (company) has to be indicated.
Accruals are subdivided into accruals I and accruals II. This is a necessary system-wide ac-
crual since accruals I (tax accruals) are not part of the equity and liabilities segment.
The following flow types are available for data entry of accruals I and II.
When it comes to long-term accruals, allocations (BWA 510) must be at cash value. Flow
types 512 and 514 reflect the interest component of accrual allocations. Numerically this is a
percentage share of the opening balance. Releases (BWA 525) are to be considered only if
the cause of the accrual formation is omitted or the accrual has been set too high.
It has already been mentioned at this point that accruals for outstanding invoices are to be
reported under accounts payable and provisions for personnel under other liabilities.
1.4.6.2.8 Data entry of short-term financial liabilities, short-term trade payables and
financial leasing
Liabilities are to be classified by subsidiary, joint venture, associated enterprise and foreign
third party. On page 43 and the following is the guideline laid down that determines which
companies are subsidiaries, joint ventures and associated enterprises. This classification is
binding.
When entering liabilities with subsidiaries, joint ventures and associated enterprises, the re-
spective partner unit (company) has to be indicated.
Accruals are subdivided into accruals I and accruals II. This is a necessary system-wide ac-
crual since accruals I (tax accruals) are not part of the equity and liabilities segment.
The following flow types are available for data entry of accruals I and II.
Movement types Description
500 Opening balance
505 * Opening balance currency translation
508 * Sub-group currency translation
510 Increase
512 Interest increase
514 Interest decrease
515 Additions consolidation group (only for first consolidation)
520 Availment
525 Reversal
530 * Disposals consolidation group
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 26 of 221
535 Transfer
* this sub-items have to be used only for group purposes and are not allowed for using in
the individual financial statement
Releases (BWA 525) are to be considered only if the cause of the accrual formation is omit-
ted or the accrual has been set too high.
Passive deferred taxes are entered based on the classification (by balance sheet account).
Use the flow types below for this purpose.
Movement type Description
800 Opening balance
805 * Opening balance currency translation
808 * Opening balance sub-group currency translation
810 Income from tax rate change
820 Expenses from tax rate change
830 Income
840 Expenses
850 Additions consolidation group (only for first consolidation)
860 * Disposals consolidation group
870 Transfer
* this sub-items have to be used only for group purposes and are not allowed for using in
the individual financial statement
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 27 of 221
When recording the profit and loss account, e.g. turnover with subsidiaries, joint ventures
and associated enterprises, the respective partner unit (KWS company) or third party
(999) has to be indicated.
In addition, the region is queried for the revenue and expense posi-
tions. In version 100 "AARDUMMY" (no country and no region) is
always indicated. This characteristic can not be eliminated for
data entry in version 100 since it is version-independent.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 28 of 221
Data entries are made not at the company level but only at the profit center
level. In version 200 only selected positions of assets and equity/liabilities
are entered (see 1.4.5. Definition of assets segment and equity/liabilities
segment). The income statement has to be created up to the operating income.
The net method is to be used for data entry of fixed assets. When opening the window "sub-
positions" all existing flow types are shown. During data entry only BWA 100 is used for
the opening balance sheet. In the following year only the net value, that is, an addition or
a retirement, is recorded. The accumulated purchasing or production costs are carried over
by the system to the next period. The balance is always brought forward on July 1 of the fol-
lowing year, that is, not at the semi-annual closing. Current changes are entered on the semi-
annual and year-end closing.
If a declaration of partner units is made (e.g., with financial assets), the respective profit
center (no company) is to be selected.
1.4.6.3.2.1 Stocks
Stocks of finished goods which following from deliveries by subsidiaries and jount ventures
have to be entered with a partner unit (company). As partner unit the profit center of the de-
livering company has to be used mandatory. If the delivery of stocks contains an intercom-
pany profit the additional data have to be completed from both companies (supplier and re-
ceiver). The supplying company (normally the division controlling) has to inform the receiv-
ing company if an intercompany profit has to be eliminated.
Receivables have to be divided into receivables with subsidiaries, joint ventures, associated
companies and third parties. Under point 1.7.2. of the guideline the companies are deter-
mined into subsidiaries, joint ventures and associated companies. This structur is obliga-
tory.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 29 of 221
The receivables have to be entered according to their term. For this purpose the following
sub-items have to be used:
Sub-item Term
200 Term until one year
210 Term longer than one year
By entry receivables with subsidiaries, joint ventures and associated companies the partner
unit (profit center) has to be specified.
Long-term accounts payables are to be classified by subsidiary, joint venture, associated en-
terprise and foreign third party. On page 43 and the following is the guideline laid down that
determines which companies are subsidiaries, joint ventures and associated enterprises. This
classification is binding.
When entering liabilities with subsidiaries, joint ventures and associated enterprises, the re-
spective partner unit (profit center) has to be indicated.
Version 200 only has accruals II since only these are a component of the equity/liabilities
segment.
The following flow types are available for data entry of accruals II.
When it comes to long-term accruals, allocations (BWA 510) must be at cash value. Flow
types 512 and 514 reflect the interest component of accrual allocations. Numerically this is a
percentage share of the opening balance. Releases (BWA 525) are to be considered only if
the cause of the accrual formation is omitted or the accrual has been set too high.
It has already been mentioned at this point that accruals for outstanding invoices are to be
reported under accounts payable and provisions for personnel under other liabilities.
Liabilities are to be classified by subsidiary, joint venture, associated enterprise and foreign
third party. On page 43 and the following is the guideline laid down that determines which
companies are subsidiaries, joint ventures and associated enterprises. This classification is
binding.
When entering liabilities with subsidiaries, joint ventures and associated enterprises, the re-
spective partner unit (profit center) has to be indicated.
Version 200 only has accruals II since only these are a component of the equity/liabilities
segment.
The following flow types are available for data entry of accruals II.
Releases (BWA 525) are to be considered only if the cause of the accrual formation is omit-
ted or the accrual has been set too high.
a) with partner unit ( foreign third party or KWS profit center) and
b) region (only the country) are to be entered.
Expenditures are entered only with region (quarter and half year region, year end only
the country).
1.4.6.3.8 Data entry of appendix entries at the company level for general profit-center-
independent information
Data entry is done right down to interest expenditures, interest profits and non-scheduled
write-down of financial assets without partner unit and sub-positions. For the single items no
additions or retirements are to be presented.
The liabilities for investments contained in accounts payable are to be presented separately.
To determine the average number of employees in the fiscal year, the actual quantity at the
end of the quarter (Sept. 30, Dec. 31, Mar. 31 and June 30) is to be taken as the basis. This
quantity per quarter is to be added up and then divided by four.
If active and passive deferred taxes are balanced out each other, they are to be indicated
here.
If enterprises are purchased or sold, the share of cash and cash equivalents in the purchas-
ing/selling price and the purchased or sold cash and cash equivalents are to be indicated.
Exceptional costs must be assigned to the listed positions and meet this criteria.
1.4.6.3.9 Data entry of appendix entries per profit center for directly creditable infor-
mation
Investments in fixed assets (only the investments not the total value of the fixed assets) are
to be indicated per asset group. Furthermore, amortizations of fixed assets are to be clarified
per profit center.
Other non-cash expenditures and earnings have to be indicated according to the pre-
scribed classification.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Overdue accounts receivable, earnings and losses from the sale of equity interests as well as
extraordinary depreciation have to be indicated.
To determine the average number of employees in the fiscal year, the actual quantity at the
end of the quarter (Sept. 30, Dec. 31, Mar. 31 and June 30) is taken as the basis. This quan-
tity per quarter is added up and then divided by four.
With DET the possibility exists to illustrate the entered data as a log. This standard report
can also be printed out to make the data available for the auditors directly. The log can be
accessed as follows:
Afterwards the data entry log has to be configurated according to the illustrated data.
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Status: Sept. 30, 2009 Page 33 of 221
The selections (version, period etc.) are taken over from the global parameters. In the report
header the consolidation unit and the data entry layout have to be selected. The flag for the
display of subassignments should be setted, because of the display of subitems and partner
units the log is getting meaningful. As meaningful subassignments the subitem, the partner
unit and the region are considered. Reported data in group currency and standardizing en-
tries in group and local currency must not be selected, because reported data have to be en-
tered and audited generally in local currency. On this account the flag has to be setted on re-
ported data in local currency. For the output type the possibility exists to illustrate the data
directly in the DET (Microsoft Access report) or as a pivot table in Microsoft Excel.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 34 of 221
Access report
Pivot table
Both output types are useful for any layouts (balance sheet, p&l account, annex etc.). By us-
ing the pivot table it is necessary that the company and the period will be inserted manually.
The selections (version, period etc.) are taken over from the global parameters. Besides the
consolidation unit supply and inventory data can be analyzed.
Subitems are not available for the additional financial data. For the output type exists only
the possibility to illustrate the data direct in the DET (Access report).
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The Active Excel reports have to be used before data delivery to the corporate headquarters
in order to check the statements concerning to plausibility. The validations, which are in-
stalled in the reports cannot be achieved from the DET, because they are spanned about
various versions. Active Excel have to be started about the menu >Start >Programs >SAP
Interactive Excel. The fastest and easiest way is to start the report with a double click. Af-
terwards the connection to the DET has to be established via the menu >SAP >Log on.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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In the following window the path for each user to the respective DET has to be registered
one-time. With a double click on the entry “other MS-Access database” and the operation
“browse” the path can be specified.
click
After logging in a request occurs if the data should be refreshed. The yellow marked fields
consist of parameters like the period, the fiscal year or the partner unit. These can be adapted
everytime.
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adaption
For the profit centers not relevant the partner unit 999 has to be used. In order not to have an
automatical update of the data with every change the flag under >SAP >Refresh values
automatically should be deactivated.
After the changes of the parameters have been made the update of the whole workbook can
be started under >Consolidation >Import data >Workbook.
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Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 38 of 221
For updating the actual sheet and not the whole workbook this can be activated among >Im-
port data >Active matrix.
Before preparation of the financial statement the intercompany balance have to be done with
the forms which are designed for this reconciliation. For the correct handling the following
example has to be used.
12421000 Loans with subsidiaries long 23120000 Loans with subsidiaries long
12422000 Loans with joint ventures long 23130000 Loans with joint ventures long
23120000 Loans with subsidiaries long 12421000 Loans with subsidiaries long
23130000 Loans with joint ventures long 12422000 Loans with joint ventures long
Requesting company:
Confirming company:
Date:
Trade receivables
Profit Center subsidiaries subsidiaries joint ventures joint ventures
long short long short
13211000 13211000 13212000 13212000
ZR-ZR
ZR-ANL
ZR-FE
MA-MA
MA-ÖF
MA-FE-MA
MA-FE-ÖF
GT-GT
GT-FE
CF-CF
CF-FE
CF-LDW
CF-CONS
Total 0,00 0,00 0,00 0,00
Ctrl.
Trade payables
Profit Center subsidiaries subsidiaries joint ventures joint ventures
long short long short
23210000 24210000 23220000 24220000
ZR-ZR
ZR-ANL
ZR-FE
MA-MA
MA-ÖF
MA-FE-MA
MA-FE-ÖF
GT-GT
GT-FE
CF-CF
CF-FE
CF-LDW
CF-CONS
Total 0,00 0,00 0,00 0,00
Ctrl.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 41 of 221
Only when the partner unit informs in which profit center the corresponding posting was ef-
fected by using these schedule, the data entry can takes place correctly (see below example).
After the requesting company has entered its data completely the file will be sent to the con-
firming company per eMail. The confirming company will insert its data into the file. If no
differences arise the confirmed file will be sent to the requesting company. Otherwise the
differences have to be resolved. After reconciliation and if you are not able to resolve the
differences please forward the forms to the group accounting department.
Receivables and payables have to be shown only under the position “joint ventures” if both
companies are joint ventures. If one company is a subsidiary and the other one is a joint ven-
ture both companies have to be classified the receivables and payables under the position
“subsidiary”.
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Status: Sept. 30, 2009 Page 42 of 221
1.4.10 Validation of provided data for version 100 (company) and 200 (profit center)
After data entry and before data export the companies have to verify their data via Active-
Excel-Tool.
After receiving all financial statements the financial department-group accounting has to oc-
cur once more a validation of version 100 and 200 via Activ-Excel-Tool. This tool checks if
profit center assets, profit center liabilities, profit center income and profit center expenses
(version 200) will correspond with the amounts shown in version 100 (company level). The
checkup has to be occurred promptly (not longer than two days) after receiving the data
files. If a variance between the versions is existing the supplying company has to be in-
formed. The differences have to be clarified by the company. The revised data have to be
available to KWS again. The checkup of the delivered data files has to be executed again.
The checkup has to be documented and saved on the central data memory (server J).
- Profit and loss statement up to net income of the year at company level
- Balance sheet at company level
- Complete movement-schedule information for fixed assets, equity and accruals
- Profit and loss statement up to statement of operating result at profit center level.
- Balance sheet segment - assets and liabilities at profit center level with simplified
movement-schedule information for fixed assets, equity and accruals
- IFRS-information have to be included in the notes at company/profit center level
- Additional information at profit center level: headcount and personnel costs, invest-
ments, type of costs and other division information.
- Profit and loss statement up to net income of the year at company level
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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- Profit and loss statement up to statement of operating result at profit center level
- Balance sheet segment - assets and liabilities at profit center level with simplified
movement-schedule information for fixed assets, equity and accruals
- IFRS-information have to be included in the notes at company level
- Profit and loss statement up to statement of operating result at profit center level
- Balance sheet segment - assets and liabilities at profit center level with simplified
movement-schedule information for fixed assets, equity and accruals
- Interest-, participation-, taxes- and extraordinary-result at company level
- Other assets and liabilities at company level
- Additional information on profit center: personnel costs, investments, type of costs and
other division information.
Actual forecast
Period 3 (1. Act. Forecast), Period 6 (2. Act. Forecast), Period 9 (3. Act. Forecast, Pe-
riod 12 (4. Act. Forecast)
- Profit and loss statement up to statement of operating result at profit center level
- Balance sheet segment - assets and liabilities under profit center with simplified
movement-schedule information for fixes assets, equity and accruals
- Interest-, participation-, taxes- and extraordinary-result at company level
- Other assets and liabilities at company level
- Additional information on profit center: personnel costs, investments, type of costs and
other division information.
The figures of the 1-year-budget (Version 400, Period 3) have to be copied into the
1. Actual Forecast (Version 300, Periode 3). After correcting the figures according
to current findings the first actual forecast will be completed.
The figures of the 1 Act. Forecast (Version 300, Period 3) have to be copied into the
2. Actual Forecast (Version 300, Periode 6). After correcting the figures according
to current findings the second actual forecast will be completed.
The figures of the 2 Act. Forecast (Version 300, Period 6) have to be copied into the
3. Actual Forecast (Version 300, Periode 9). After correcting the figures according
to current findings the third actual forecast will be completed.
Up to now it is not necessary to prepare the figures for the 4. Actual Forecast in
DET. If there are changes in the figures according to current findings, please con-
tact your division controller.
The following time frame can be used as a guide for preparing quarterly statements.
Day of follo-
wing month
Deadline for external invoices 8.
Beginning of intercompany balance (receivables / liabilities) 9.
Fixed assets valuation local GAAP (per profit center) 10.
Fixed assets valuation IFRS (per profit center) 12.
Accruals valuation local GAAP (per profit center) 10.
Accruals valuation IFRS (per profit center) 12.
Internal service charges 13.
Ending of intercompany balance (receivables / liabilities) 15.
Receivables valuation local GAAP (per profit center) 15.
Receivables valuation IFRS (per profit center) 16.
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The deadline for the year-end closing is the 15th of August. This time table for preparation
the statements applies further on, because the temporary extension of two weeks has to con-
tain the audit of the statements by the auditors.
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The organisational procedure and the allocation of duties during compilation of the KWS
CONSOLIDATED FINANCIAL STATEMENT basically presents itself as follows:
- Compilation of an unconsolidated individual /interim report for the period from July
1st to June 30th in accordance with the IAS benchmark determined in the KWS
GROUP ACCOUNTING GUIDELINES. Coordination of accounts receivable, ac-
counts payable, revenue and expenditure must take place immediately after the clos-
ing date for entries.
- Auditing and attestation of the financial statements by certified accountants. The se-
lection of certified accountants must be concerted with the group management prior
to the audit assignment.
- On-schedule transmission of the KWS ANNUAL ACCOUNTING DOCUMENTS
KWS SAAT AG
According to IAS 1.7, a complete financial statement contains the following sections:
BALANCE SHEET
PROFIT AND LOSS STATEMENT
STATEMENT OF ALTERATION OF THE EQUITY CAPITAL
CASH FLOW STATEMENT
ACCOUNTING AND VALUATION METHODS AS WELL AS EXPLANATORY SUP-
PLEMENTARY INFORMATION.
The annual statement of accounts must convey a picture of the assets, liabilities, financial
position and profit or loss as well as of the company’s cash flow in accordance with the ac-
tual circumstances.
The accounting and valuation methods must be selected and applied in such a way that the
financial statement corresponds with all provisions of each applicable IAS and the respec-
tive interpretations. Should an IAS standard be unavailable for the accounting issue, the fol-
lowing criteria must be observed:
- Provisions of other IAS and interpretations that deal with similar issues
- Regulations presented in the basic concept (framework)
- Regulations of other standard setting bodies and industrial practices, as far as these
are compatible with the IAS.
Special cases must always be entered in the balance sheet in concert with the group man-
agement.
While compiling the financial statement, the management must estimate the company’s abil-
ity to continue business operations.
A company must draw up its financial statement, with the exception of the cash flow state-
ment, in accordance with the concept of allocating revenue and expenses to applicable
accounting periods.
Presentation and identification of entries in the financial statement must be maintained from
one period to the next, provided the reasons stated in IAS 1.27 do not require an alteration.
Every essential entry must be accounted for separately in the financial statement. Inessential
amounts must be combined with amounts of similar nature or with functions and do not need
to be accounted for separately.
Asset values and debts must not be offset with each other, provided offsetting is not de-
manded or permitted by an IAS. Offsetting of revenue entries and expenditure entries must
only be applied for IAS 1.34.
Provided an IAS does not permit or stipulate anything else, comparative information regard-
ing the previous period must be stated for all quantitative information.
A financial statement must be clearly identifiable as such. Every part of the financial state-
ment must be clearly marked. A financial statement must be drawn up at least annually.
Compilation of legally prescribed semi-annual statements or quarterly statements must also
take place in an IAS-conform manner. Every company must account for short-term and
long-term assets and debts as separate itemised groups in the balance sheet. The minimum
itemisation method of both the balance sheet and profit and loss statement is uniformly de-
termined throughout the group and must be applied by all subsidiaries and associate compa-
nies. The alteration of equity capital must be specified in a separate compilation. A cash
flow statement must be drawn up.
Information about the basic principles of compilation of the financial statement and the
accounting and valuation methods
Information requested by the IAS
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Status: Sept. 30, 2009 Page 49 of 221
- Consolidation of capital
- Consolidation of debts
- Consolidation of expenditure and revenue
must be carried out for both subsidiaries and joint ventures. All intra-group information and
connections, which must be provided by subsidiaries, must also be provided by joint ven-
tures.
Currency conversion in the reporting currency EURO will made principle in Einbeck.
The reporting entity inform exclusiv in local currency (in 1000 local currency units
TLC).
The following procedure must be adhered to during conversion of the financial statements of
subsidiaries and associate companies:
Both monetary and non-monetary assets and debts must be converted in accordance with
the key date rate;
The revenue and expenditure items must be converted according to the average annual
rate. IAS 29 applies to high inflation countries.
All arising conversion rate differences must be recorded in a separate entry in equity
capital without affecting profits.
1.6.6 Matching of expenses and income as per June 30th and per quarter
As basis of calculation previous values are used for accruals of returns of goods. The follow-
ing example helps to make the postings and the approach clear.
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Status: Sept. 30, 2009 Page 50 of 221
On the previous values (previous period) a quota of returns will be determined, e.g. 10 per-
cent. Consequently the following postings arise:
Finally only the margin in the amount of 50 will accrue. Consequently, the balance sheet
and the profit and loss account are as follows:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 51 of 221
With the set-up of returns as per June 30th, the proceeding is to be used similar to March
31st. That means that it concerns the same postings. By July 1st the accruals have to be
turned back (cancellation of the postings of June 30th). Actual returns, which arrived in July
and August, are recorded then as follows:
If discounts are granted in July and August on the sales of the last financial year, then these
are to be shown as follows:
An accrual of royalties applies to sales in corn, rape and sunflowers. These accrual occurs by
the responsible persons of KWS MAIS GmbH. Accruals of royalties are posted only in the
group accounting. Invoicing of the final royalty invoice occurs for rape sales on December
31st and for all other crops on June 30th.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 52 of 221
Invoicing of breeding services to KWS SAAT AG has to be done by the fifth day of the fol-
lowing month. The settlement date has to be within the invoiced period (quarter). Should be
the accounting documents not be complete an estimation of the breeding costs has to be
made. The breeding services can be alternatively invoiced on basis of the budgeted quarter.
Differences from the previous period have to be invoiced in the following period.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 53 of 221
A parent company that compiles a consolidated financial statement must basically consoli-
date all national and foreign subsidiaries. IAS 27.13 regulates exceptions for exclusion from
the consolidated financial statement. The general principle of essentiality (analog. frame-
work 44) applies to subsidiaries of subordinate significance. The reasons for non-inclusion
of a subsidiary must be stated.
The subsidiaries and associate companies mentioned therein are subdivided as follows:
1.7.1.1 Subsidiaries
A Joint venture is a contractual agreement, in which two or more parties carry out an eco-
nomic activity that is subject to joint management. A partner company must enter its shares
in a jointly managed unit in the balance sheet of its consolidated financial statement (pro-
portional consolidation).
An associated company is a company on which the shareholder can exert significant influ-
ence and which neither presents subsidiaries nor a joint venture of the shareholder. Signifi-
cant influence is assumed with 20 % and more of the voting rights and represents participa-
tion in decision-making processes without dominating these.
Depending on the type of inclusion of the subsidiaries and associate companies in the KWS
CONSOLIDATED FINANCIAL STATEMENT, the requirements in this manual apply
within a graduated scope.
The directives and explanations apply to their full extent to fully consolidated subsidiaries
and joint ventures.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 54 of 221
Full consolidation means that all assets and debts, charged up against the investment book
values and the receivables from and liabilities towards affiliated companies as well as all
expenditures and revenue, offset against intra-group expenditures and revenue are entered in
the consolidated financial statement.
Proportional consolidation means that all assets and debts in proportion, charged up
against the investment book values and the proportional receivables from and liabilities to-
wards affiliated companies as well as the proportionate expenditure and revenue, charged up
against proportional intra-group expenditure and revenue are entered in the consolidated fi-
nancial statement. Not the percentage of votes, but rather the capital share is decisive for the
proportionate fraction to be included. For joint ventures, all receivables and liabilities with
subsidiaries and joint ventures of the KWS scope of consolidation must be accounted for
and specified for each company under the position “receivables or liabilities with subsidiar-
ies and joint ventures“.
Subsidiaries and associate companies entered in the balance sheet at book values must solely
compile an IAS-financial statement to their balance sheet key date and must participate in
the reconciliation of receivables and liabilities.
Book value accounting means that interest of the respective subsidiary and associate com-
pany is entered in the balance sheet at acquisition costs or current market value.
1102 KWS LOCHOW GMBH KWL KWS SAAT AG Subsidi- Full consolidation
ary
1104 KWS KLOSTERGUT WBH KWS SAAT AG Subsidi- Full consolidation
WIEBRECHTSHAIUSEN ary
GMBH
1105 PLANTA ANGEWAND- PLT KWS SAAT AG Subsidi- Full consolidation
TE PFLANZENGENETIK ary
UND BIOTECHNOLO-
GIE GMBH
1108 KWS SAATFINANZ SFZ KWS SAAT AG Subsidi- Full consolidation
GMBH ary
1111 RAGIS KARTOFFEL- RAG KWS SAAT AG Subsidi- Full consolidation
ZUCHT & HANDELS- ary
GESELLSCHAFT MBH,
Klein Wanzleben
1115 EURO-HYBRID GMBH EHY KWS SAAT AG Subsidi- Full consolidation
ary
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 55 of 221
1303 GREAT LAKES HY- GLH KWS SEEDS INC. Subsidi- Full consolidation
BRIDS INC. ary
1304 Van Rijn-KWS B.V. vR-KW RAGIS KARTOF- Subsidi- Quota consolidation
FELZUCHT & HAN- ary
DELSGESELL-
SCHAFT MBH
1305 BETASEED FRANCE BTS-F BETASEED INC. Subsidi- Full consolidation
S.A.R.L. ary
1306 ACH SEEDS INC. ACH BETASEED INC. Subsidi- Full consolidation
ary
1350 KWS ARGENTINA S.A. KW-RA KWS MAIS GMBH Subsidi- Full consolidation
ary
1411 SEMILLAS KWS CHILE KW- KWS SAAT AG Subsidi- Full consolidation
LTDA. RCH ary
2202 SOCIETE DE MOM KWS LOCHOW Joint Quota consolidation
MARTINVAL S.A. GMBH Venture
2280 KWS R&D RUS LTD. KW- KWS RUS LTD. Subsidi- Full consolidation
RD- ary
RUS
2501 AGRELIANT GENETICS AGR-U GREAT LAKES HY- Joint Quota consolidation
LLC. BRIDS INC. Venture
2510 AGRELIANT GENETICS AGR-C KWS SAAT AG Joint Quota consolidation
INC. Venture
Abs. paragraph
AfA deduction for depreciation (depreciation)
Acq. costs Acquistion costs
AMC Acquistion or manufacturing costs
AVK general administrative costs
bspw. for example
BWA movement type
bzw. respectively
d.h. i.e.
dt deciton
EAV profit and loss transfer agreement
Excl. exclusive
EG European Community
EStG Income Tax Act
€ EURO
ggf. if appropriate
GJ financial year
GuV profit and loss statement
GuV-Pos.: profit and loss statement position
HaBi trade balance
HGB German Commercial Code
HK manufacturing costs
i.d.R. as a rule
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter I
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Status: Sept. 30, 2009 Page 57 of 221
INTRODUCTION
The following specifications per position concern the general itemisation, accounting, valua-
tion and explanation regulations as well as the binding accounting and valuation regulations
determined for the KWS GROUP.
The documents to be submitted to KWS SAAT AG for the consolidated financial statement
must be compiled exclusively in accordance with the following guidelines.
The balance sheet positions and the profit and loss statement positions are described in the or-
der listed in the forms.
13100000 INVENTORIES
13110000 Raw materials and supplies
13120000 Work in process
13130000 Unfinished biological assets
13140000 Finished goods and services
21000000 EQUITY
21100000 SUBSCRIBED CAPITAL
21200000 CAPITAL RESERVE (Addit. paid in capital)
21300000 REVENUE RESERVES
21310000 Legal reserve
21320000 Reserve for own shares
21330000 Statutory reserves
21340000 Other revenue reserves
21400000 ACCUMMULATED PROFIT/ACCUMULATED LOSS
21410000 Unappropriated retained earnings brought forward/Cumulative
losses brought forward
21420000 Net income / Net loss for the current year
21430000 Accumulated profit of the current year before first consolidation
21440000 Net income before change of quota
21450000 Application of profits
21451000 Dividend issued in current year
21452000 Transfer from revenue reserves
21452100 Transfer from legal reserve
21452200 Transfer from reserve for own shares
21452300 Transfer from statutory reserves
21452400 Transfer from other revenue reserves
21453000 Transfer to revenue reserves
21453100 Transfer to legal reserve
21453200 Transfer to reserve for own shares
21453300 Transfer to statutory reserves
21453400 Transfer to other revenue reserves
21500000 CURRENCY CONVERSION RATE DIFFERENCE
21600000 OTHER COMPREHENSIVE INCOME (OCI)
21610000 OCI from unrealised gains/losses out of securities (fixed assets)
/ other financial assets
21620000 OCI from unrealised gains/losses out of securities (current as-
sets) / available-for-sale
BORROWED CAPITAL
36000000 Taxes
36100000 Taxes on income
36200000 Deferred taxes
tangible assets
biological assets
financial assets.
The development of the fixed capital assets during the financial year must be accounted for in
the annual financial statement in form of an asset history sheet, which must be compiled ac-
cording to the direct gross method.
The asset history sheet must be publicised in the annex or balance sheet.
The valuation principles for the fixed capital assets are regulated in the guideline for each
group of assets.
Benefits of public authorities must be entered in the balance sheet in accordance with IAS 20
and must be depreciated on determination of the book value. Balance sheet entry of an accrual
item on the liabilities side does not take place. The benefits of public authorities have to be
shown in the annex.
An intangible asset resulting from research may not be entered on the assets side. Research
costs must be recorded as expenditure in the accounting period in which they accrue.
An intangible asset resulting from development may only be entered on the assets side, if it
complies with the conditions of IAS 38.45.
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Status: Sept. 30, 2009 Page 66 of 221
Compliance with the conditions requires the existence of detailed budgetary accounts and in-
formative cost accounting. Separation of research and development costs must be particularly
safeguarded.
After initial entry, an intangible asset must be entered with its acquisition or manufac-
turing costs, less all cumulative depreciation and cumulative diminution expenditure.
If a company is unable to differentiate between the research phase and the development phase
of an internal project for creation of an intangible asset, the company treats the expenditure
connected with this project as though it has solely accrued in the research phase.
Self- created brand names, printed titles, publishing rights, lists of customers and similar is-
sues may not be entered on the assets side.
The financial statement must contain, for each group of intangible assets, the information re-
quired according to IAS 38.107. One must distinguish between self-created intangible assets
and other intangible assets.
KWS regulations:
Development costs may only be entered on the assets side if particular, specified pre-
conditions exist. Entry on the assets side is always necessary if it is very likely the devel-
opment work will lead to future inflow of financial means, which cover the respective
development costs in excess of the normal costs. Various criteria must also be cumula-
tively fulfilled regarding the development project and the product (type) to be devel-
oped. These pre-conditions presently do not exist in the KWS Group and development
costs must not be entered on the assets side.
2.1.1.2 Goodwill
Calculation and balance sheet entry of the goodwill for the consolidated financial statement is
regulated in IAS 22.
A surplus in acquisition costs of the company acquisition, exceeding the purchaser’s shares in
the attributable current market value. The identifiable assets and debts on the date of the ex-
change procedure must be described as goodwill and entered as a property asset. Separable
acquired property assets, which are subject to temporal use, must be systematically depreci-
ated according to the useful life. If the useful life is indefinite, the goodwill must be subjected
to an impairment test, either on an annual basis or in the event of signs of diminution of value.
Necessary depreciation must be accounted for as expenditure of the accounting period.
In the individual financial statement of a parent company, shares in subsidiaries, which are in-
cluded in the consolidated financial statement must either be:
- entered in the balance sheet with their acquisition costs;
- entered in the balance sheet according to the equity method, as described in IAS 28;
- or entered in the balance sheet as financial means available for sale, as described in
IAS 39.
Accounting according to the equity method takes place in the KWS Group, exclusively
in the consolidated financial statement. In individual financial statements, all shares in
subsidiaries must be entered in the balance sheet to acquisition costs or as financial
means available for sale.
KWS regulations:
None
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
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IAS 16 must be applied to balance sheet entry and valuation of tangible assets.
Tangible assets comprise are assets owned by a company for purposes of manufacture or sup-
ply of goods and services, for leasing to third parties or for administrative purposes and
which, according to expectations, are used longer than one accounting period.
A tangible asset must be entered as a property asset, if it is likely that the company will ac-
quire future economical benefits connected with this asset; and if the acquisition or manufac-
turing costs can be reliably determined.
KWS regulations:
The following usage periods must be applied uniformly throughout the group for systematic
depreciation of tangible assets:
Building 15 to 50 years
dar. tenements 50 years
office and production buildings massive construction 40 years
warehouses massive construction 40 years
warehouses lightweight construction 15 to 20 years
garage 40 years
greenhouses 17 to 20 years
Vehicles 5 to 10 years
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
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Status: Sept. 30, 2009 Page 69 of 221
Intangible assets which are recognized on the basis of a PPA (purchase price allocation) have
to be depreciated with the useful life of the PPA. This applies particularly customer bases, li-
censed varieties and unfinished breeding. If no PPA exists, the useful lifes according to KWS
group guideline have to be used.
Used fixed assets have to be depreciated over the probable remaining life time. Thereby
the real useful life is authoritative.
A tangible asset that is to be entered as a property asset must be assessed with its acquisition
or manufacturing costs during initial recordation. Costs of termination and reestablishment of
location are counted among the acquisition or manufacturing costs, provided these amounts
are to be shown as reserves on the liabilities in accordance with IAS 37.
After its initial entry as a property asset, a tangible asset must be entered to its acquisition
costs. less the accumulated depreciation and accumulated diminution expenditure.
Current upkeep expenses for an asset have to be treated as expenses of the period. Wage and
material costs as well as small spares are included (IAS 16.12). Major inspec-
tions/maintenance without a concrete requirement of maintenance and repair have to be capi-
talized as a replacement purchase according to IAS 16.14.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
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Status: Sept. 30, 2009 Page 70 of 221
Items to be capitalized:
New inner walls of buildings
New heating inclusive change-over from oil to gas
Loft/attic conversion inclusive new roof and gained useful areas
According to IAS 23.8 borrowing costs have to be capitalized as a part of the acquisition
or manufacturing costs, if the following premises are fulfilled:
- is about a qualifying asset
- borrowing costs have to be directly attributable.
A qualifying asset is an asset that necessarily takes a substantial period of time to get
ready for its intented use or sale (e.g. buildings, manufacturing facilities, etc.). For gen-
erally borrowed funds which are also used the for financing of qualifying assets, the
weighted average of the borrowing costs shall be taken as a capitalization rate (IAS
23.14). The beginning of the capitalization of borrowing costs occurs on that date when
the following conditions are fulfilled cumulatively (IAS 23.17):
- it incurs expenditures for the asset
- it incurs borrowing costs
- it undertakes activities that are necessary to prepare the asset for its intended
use or sale.
If the active development of a qualifying asset is suspended during extended periods, the
capitalization of borrowing costs has to be suspended according to IAS 23.20. The capi-
talization is ceased when substantially all the activities necessary to prepare the qualify-
ing asset for its intended use or sale are complete (IAS 23.22).
Other borrowing costs shall be recognized as an expense in the period in which it incurs
them.
The alternative permissible method of IAS 16 for revaluation of tangible assets is not
applied in the KWS Group. Revaluation carried out according to state law must be can-
celled.
Depreciation takes place according to the economical useful life of the property assets. The
linear depreciation method must be used exclusively. Valuation measures motivated by tax
cannot be transferred onto the financial statement. Economically necessary, deviant usage pe-
riods have to be explained in the annex.
The information according to IAS 16.73 and 74 must be provided in the financial statement.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 71 of 221
According to IAS 36.8, a company must on each balance sheet key date assess whether any
clue exists as to whether the value property asset could be debased. The net sale value or us-
age value according to IAS 36 must be determined for this purpose and compared to the book
value. If the attainable amount of a property asset proves to be lower than the book value,
then the book value must be lowered to the attainable amount. The diminution expenditure
must immediately be recorded as expenditure in the profit ands loss statement. If the esti-
mated diminution expenditure exceeds the book value of the property asset, then the company
must only, and only then, enter a debt, if a different IAS requests this. In the event of diminu-
tion of value, possible depreciation expenditure must be adapted for the remaining useful life.
According to IAS 20.24, benefits of public authorities for property assets, inclusive of non-
monetary benefits must either be presented in the balance sheet as accrual items on the liabili-
ties side or set off on determination of the book value of the property asset.
The information according to IAS 20.39 and 40 must be provided in the financial statement.
Finance-leasing relationships must be entered in the balance sheet in accordance with IAS 17.
Lessees must enter property asset finance-leasing relationships and debts to the same amount,
namely to the amount of the attributable current market value of the object of lease at the be-
ginning of the leasing relationship, or with the actual cash value of the minimum leasing
payments, provided this value is lower. The interest rate underlying the leasing relationship
discount factor on calculation of the actual cash value of the minimum leasing payment, pro-
vided it could be determined in a viable manner. If this is not the case, the lessee’s marginal
interest rate for borrowed capital must be applied.
Leasing payments must be divided into costs of financing and redemption proportion of the
remaining debt. The costs of financing must be distributed across the term of the leasing rela-
tionship in such a way that a steady interest rate on the remaining debt emerges throughout
the accounting period.
In every accounting period, finance leasing leads to depreciation expenditure for depreciable
property assets, as well as to financing expenditure. The depreciation principles for deprecia-
ble objects of lease must correspond to the principles that are applied to depreciable property
assets owned by the company. Depreciation must be calculated in accordance with IAS 16,
tangible assets and IAS 38, intangible assets. If at the beginning of the lease relationship it is
not certain that the property is transferred to the lessee, the property asset must be completely
depreciated across the shorter of the two periods, term of leasing relationship or useful life.
The information according to IAS 17.23 and 27 must be stated in the financial statement.
Leasing relationships in the financial statements of the lessors must be entered in the balance
sheet in accordance with IAS 17.28 to 48. IAS 17.49 to 57 must be applied for Sale-and-
leaseback-Transactions.
Component Approach
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 72 of 221
According IAS 16.43 property, plant and equipment have to be split and accounted into their
different parts if:
- the cost of a part of property, plant and equipment must be a significant part in
relation to the whole property, plant and equipment; and
- the significant parts must have different useful lifes.
2.1.2.1 Land, similar rights and buildings, including buildings on third party land
This position comprises the company’s entire real estate, inclusive of the buildings and com-
pany buildings on foreign (e.g leased) premises.
This position also comprises facilities that serve the use of the building (e.g. elevators, heat-
ing, lighting and air conditioning systems).
KWS regulations:
The acquisition costs for land must not be systematically (strictly forbidden) depreciated.
Should irregular depreciation be necessary, this must be accounted for and specified on its
merits.
This position contains equipment and machines connected to the actual production process
and which are not an economical part of a building.
KWS regulations:
In the KWS GROUP, this position contains equipment and machines that directly serve the
production and processing of seeds, as well as supply facilities for electricity, heating and
cooling energy:
Position content:
conveyor systems and warehouse vehicles (e.g. conveyor belts, bagged goods conveyors,
fork-lift trucks)
drying systems
dust removal systems and filter systems
seed-processing and seed-cleaning machines
seed treatment systems (e.g. seed dressing and pilling machines)
weighing machines
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 73 of 221
packaging systems
silos, containers
soil conditioning machines (e.g. compost machines, potting and reporting machines)
agricultural machines (e.g. ploughs, harrows, sowing machines, plant protection spraying ma-
chines)
Harvesters (e.g. beet harvesters, combine harvesters, charging generators)
electrical devices (e.g. current transformers, emergency backup generators)
Machines and facilities for power and heat generation (e.g. combined heat and power station,
oil storage tank)
Facilities for cold production (e.g cooling systems, cooling chambers, climate chambers)
Miscellaneous
Valuation:
The acquisition and manufacturing costs are systematically depreciated across the average
useful life.
Disposals are valuated at the residual book value at the end of the month of disposal (pro rata
temporis).
This position contains other equipment and facilities, which do not directly serve actual pro-
duction, and which are not an economical part of a building.
KWS regulations:
In the KWS GROUP, this position contains equipment and devices that do not directly serve
the production and processing of seeds, as well as research and laboratory facilities:
Position content:
vehicle fleet (e.g. passenger cars, heavy goods vehicles, tractors)
company-owned tanking farm
office furniture and equipment
public relations inventory (e.g. company film, film and photography equipment) data process-
ing systems, Personal Computers, printers, radio equipment
laboratory facilities and equipment (e.g. microscopes, heating cabinets, refrigerators, seed
cabinets, laboratory trolleys, small seed-dressing machines)
workshop facilities, tools
greenhouse facilities (e.g. seed tables, lighting systems, irrigation systems)
plastic greenhouses
irrigation systems
alarm devices (e.g. fire detectors, loudspeakers)
canteen facilities
all kinds of low value commodities
miscellaneous
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 74 of 221
Valuation:
The acquisition and manufacturing costs are systematically depreciated across the average
useful life.
Disposals are valuated at the residual book value at the end of the month of disposal (pro rata
temporis).
Assets with maximum acquisition costs less than 1,000 Euro have to be capitalized as low-
cost assets. These assets have to be depreciated completely and have to be shown as a disposal
in the fixed assets movement schedule. Assets with acquisition costs of more than 1,000 Euro
have to be depreciated systematically with the straight-line method across the average useful
life (see page 67 and the following).
2.1.2.4 Prepayments
Prepayments effected for acquisition of tangible fixed assets only must be recorded here.
Equipment under construction are not yet commissioned equipment on the balance sheet key
date. Reclassification into the appropriate position of the tangible assets takes place after
commissioning. This means that capital expenditures which were started and accomplished
during the business year are shown as addition to the relevant position of tangible fixed assets
and not any longer as prepayments.
KWS regulations:
Should prepayments for acquisition of property assets of subsidiaries and associate companies
be entered in the balance sheet here, and then these must be accounted for and specified sepa-
rately.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 75 of 221
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule.
3) Only a simplified movement schedule will be required for the versions 200, 300 and
400 which consist of the opening balance, additions and disposals.
2.1.3.1 Livestock
Livestock is entered in the balance sheet according to IAS 41.
Livestock (e.g. dairy cows), which serve business operations for a longer term (longer than a
normal course of a business cycle), must be entered in the balance sheet to their attributable
current market value here. Profit or loss from initial entry of a biological asset to the attribut-
able current market value must be allocated in the equity capital, not affecting income, in ac-
cordance with IFRS 1.
KWS regulations:
none
Living plants (e.g. orchards, forestry stocks), which serve business operations for a longer
term (longer than a normal course of business cycle), must be entered in the balance sheet to
their attributable current market value here. Profit or loss from entry of a biological asset to
the attributable current market value must be included in the result of the accounting period.
KWS regulations:
None
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 76 of 221
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
In the financial assets increases in value by rise of the stock exchange course are to be repre-
sented with subitem 145 (acquisition costs write-up financial assets). This subitem is to used
exclusively for financial asstes. The contra account for such increases (not affecting the in-
come) is the OCI (Other Comprehensive Income), which is a subaccount of the equity.
Balance sheet entry of subsidiaries takes place according to IAS 27.29 to 31.
In the KWS Group, all shares in subsidiaries must be shown in the balance sheet with their
acquisition costs in the individual financial statement of a parent company. IAS 36.88 to 93
must be applied in the event of diminution in value of this property asset. IAS 36.107 to 112
must be observed for increased valuation. Acquisition costs and possible diminution in value
must be presented separately for each company in the asset history sheet.
If a company is held for the purpose of sale, the financial asset available for sale must be en-
tered in the balance sheet in accordance with IAS 39 financial instruments. This property must
be allocated according to the term of the intent to sell.
KWS regulations:
A joint venture is a contractual agreement, in which two or more parties conduct a commer-
cial activity that is subject to joint management. Joint Ventures are proportionately included
in the KWS Group. The proportional consolidation is an accounting method, by means of
which the partner company’s share in all asset values, debts, revenue and expenditure of a
jointly managed unit is combined with the respective items of the partner company’s financial
statement.
In its consolidated financial statement, a partner company must enter in the balance sheet its
shares in a jointly managed unit. With the report applicable report format, the asset values,
debts, revenue and expenditure of the jointly managed unit are combined with the identical
items of the Group.
IAS 36.88 to 93 must be applied on occurrence of diminution in value of this asset value. IAS
36.107 to 112 must be observed for increased valuation. Acquisition costs and possible dimi-
nution in value must be presented separately for each company in the asset history sheet.
KWS regulations:
Valuation allowances on shares in joint ventures have to be announced separately to the head-
quarters via e-mail.
Shares in associated companies are entered in the balance sheet according to IAS 28.
An associated company is a company on which the shareholder can exert significant influence
and which is neither represents a subsidiary nor a joint venture of the shareholder. Significant
influence is the possibility to participate in the associate company’s fiscal and business policy
decision-making processes, without being able to control these decision-making processes. If
a shareholder holds 20 % and more of the associated company’s voting rights, it is assumed
that significant influence exists.
The shares in an associated company must be entered in the balance sheet with their acquisi-
tion costs in the shareholder’s individual financial statement, if these are not exclusively held
with a view to sale in the near future.
On occurrence of diminution of this asset value, IAS 36.88 to 93 must be applied. IAS 36.107
to 112 must be observed for increased valuation. Acquisition costs and possible diminution of
value must be specified separately for each company in the asset history sheet.
Shares in an associated company must be entered in the balance sheet in the consolidated fi-
nancial statement according to the equity method. If these shares are held for the purpose of
resale or are they subject to stringent, long-term limitations, then valuation takes place accord-
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 78 of 221
ing to IAS 39, financial instruments. If these conditions are fulfilled in accordance with IAS
28.11, valuation according to the equity method must be discontinued.
KWS regulations:
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
2.1.4.4 Loans
Loans have to be devided according to the debtor in to loans agains subsidiaries, against Joint
Ventures, against associated companies and against third parties. The standard to be used in
the accounting of loans is IAS 39, especially IAS 39.10 in connection with IAS 39.19 has to
be taken into concideration. Long-term interest bearing loans are not be discounted.
Trade receivables have not to be shown among loans even if they are long-term (statement
among current assets).
Depreciations on loans, also for subsidiaries, have to be shown among other operating ex-
penses. Write-ups on loans, also for subsidiaries, have to be shown among other operating in-
come. Depreciations as well as write-ups on loans have in no case to be shown in the finan-
cial result.
Data entry:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 79 of 221
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
For other financial assets, it must be examined whether such a financial investment is to be
appropriately entered in the balance sheet according to the equity method, corresponding to
IAS 28, i.e. the shareholder exerts significant influence on the associated company. The
shareholder’s company applies the regulation from IAS 31 (joint venture) in a similar manner,
in order to determine whether the proportional consolidation or equity method is the appropri-
ate accounting method. In case neither the equity method nor proportional consolidation is
appropriate, the company must balance these financial investments according to IAS 39, fi-
nancial instruments.
Write-ups of financial assets (e.g. appreciation value because of an increase of stock market
price) have to be shown exclusively with subitem 145. If the reason for the depreciation is not
to apply, the financial asset has to be write-up.
The financial assets must be subdivided into the following categories in accordance with IAS
39.10:
a) financial investments to be held up to the final maturity (Held-to-Maturity),
b) credits and accounts receivable extended by the company,
c) asset values available for sale (Available-for-Sale).
Financial investments to be held up to the final maturity are asset values with fixed or deter-
minable payments and fixed periods of validity, which the company wishes to and is able to
hold up to maturity (e.g. fixed interest-bearing securities). Basic rule: Securities are normally
not HtM investments, because they have an unlimited maturity. These are assigned to other
financial assets. Credits and accounts receivable extended by the company have to be indi-
cated among loans respectively receivables. Financial assets available for sale depending on
the type of assets have to be shown among securities of current assets or among other finan-
cial assets. The composition of other financial assets have to be explained in the annex.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 80 of 221
Changes in value of “held-to-maturity assets“ must be accounted for, affecting net income,
in the profit and loss statement.
Changes in value of “available-for-sale assets” must be accounted for not affecting in-
come in the equity among the position “other comprehensive income (OCI)”.
All financial instruments that cannot be allocated to the financial assets must be accounted for
in the circulating assets in accordance with the determined categories.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
According to IAS 40 real estate are shown among the position “real estate held as financial
investment”, when the real estate were acquired exclusively to achieve income from rent and
lease as well as income from increased values.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 81 of 221
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
In general
Only tangible assets, which, on the closing key date, are not determined to continuously serve
business operations must be accounted for in the circulating assets.
The circulating assets must be valuated at the attributable current market value or to continued
acquisition/manufacturing costs.
Details regarding valuation are given with the description of individual positions.
The accounting and valuation principles relating to circulating assets must be specified in the
annex.
KWS regulations:
Stocks from intra-group business connections must be accounted for and specified separately.
This particularly affects the stock from deliveries from subsidiaries and associate companies
and the receivables from subsidiaries and associate companies.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 82 of 221
2.2.1 Stocks
Stocks are entered in the balance sheet according to IAS 2 and IAS 41.
The net sale value is the estimated attainable sales revenue in normal course of business, less
the estimated costs up until completion and the estimated required distribution costs.
The acquisition or manufacturing costs of stocks must include all costs of machining and
processing (inclusive of necessary production overheads), which have accrued in order to put
the stocks at their present location and into their present condition.
Stocks must be valuated with the lowest value from acquisition or manufacturing costs
and net sale value. Agricultural products and biological assets must be valuated at the at-
tributable current market value in accordance with IAS 41.
KWS regulations:
The respective position content is specified in the description of the individual positions.
Stocks from deliveries of subsidiaries and associate companies must be accounted for and
specified separately.
Prepayments received for stocks must not be deducted from stocks, but must be accounted
for under liabilities.
Raw materials and supplies are externally procured materials, which are still unprocessed, not
yet exhausted and which are included in the product or effect the production flow.
Raw materials become integral parts of the products, subordinate to main parts and auxiliary
materials. Supplies are consumed during manufacture of the products.
KWS regulations:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 83 of 221
In the KWS GROUP, seeds are in principle not accounted for as raw material, but as an
unfinished product, finished product or as goods.
Position content:
materials for seed treatment (e.g. seed dressing agent, coating matter)
packaging material
plant protecting agent and fertiliser
combustibles and fuels, lubricants
laboratory and testing material
workshop material
office material
promotional gifts and other advertising material
canteen and casino stocks
miscellaneous
Valuation:
Raw materials, auxiliary materials and operating supplies must be valuated with the lowest
value from acquisition or manufacturing costs and the net sales value. If valuation takes
place to acquisition or manufacturing costs, then the value must be determined with the aid of
the “average method” or FIFO-method (first in – first out). The LIFO-method (last in – first
out) must not be applied. The applied method must be stated in the annex.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Products that have already been machined or processed, but not complete on the balance sheet
date must be accounted for as work in process.
KWS regulations:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 84 of 221
Position content:
Delimitation between work in process and finished goods must take place as follows in the
KWS GROUP:
Work in process are goods that are, in fact, normally not sold in their stage of completion.
Fictitious saleability (e.g as animal feed or occasional sale within the scope of special transac-
tions) is not aimed at. In this sense, cultivated seeds and field inventory (growing crops) must
always be treated as unfinished. Basic seeds (BS) can according the expected use ( sale or
own multiplication) classified in work in progress or finished goods.
Finished goods are products that are normally actually sold in their stage of completion.
If seeds are used for both further processing and sale, then, due to past experience, future use
application must be estimated.
The stocks from deliveries of subsidiaries and associate companies must be reported and
specified separately.
Valuation:
Work in process must be valuated at continued acquisition or manufacturing costs.
Reproducers’ settlement price (depending on type, seed form, country of growth and crop
year) plus the acquisition costs (e.g. freight-, insurance costs and customs expenses) make up
the acquisition costs.
The production costs accumulating beside the acquisition costs must be considered.
Acquisition costs and production costs together make up the manufacturing costs.
Individual valuation is undertaken; special fictitious consumption sequences are presently not
supposed.
The acquisition or manufacturing costs may not be recoverable if stocks are damaged, entirely
completely or partially out of date or if their sales price has declined. Devaluation of stocks to
the net sales price normally takes place in form of individual value adjustment.
Data entry:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 85 of 221
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
The seed production of certified/commercial sugar beet seed has to be effected by plant culti-
vation or direct cultivation. Independent of the cultivation method allocation of material and
assumption of services have to be capitalized as work in process, if an invoicing of the costs
to the multiplicator does not occur. Local tax regulations (e.g. separate stating of free sales
for free deliveries of basic seed in Italy as well as the capitalization of consulting and sup-
port fees in France) are not to be used in the IFRS statement.
The evaluation of unfinished biological assets and agricultural products is done according to
IAS 41. Agricultural activity and indirectly the scope of application of IAS 41 is defined in
IAS 41.5. Agricultural activity is the management of sales-oriented biological transformation
of biological assets into agricultural products or into additional biological assets by an enter-
prise. If the seed will multiplicate on own or leased agricultural land it is your own responsi-
bility and risk. Consequently the seed multiplication has to be capitalized among unfinished
biological assets (agricultural live-stock). The arising acquisition and manufacturing costs are
the basis for the calculation of the assigned value on the different production stages, because
no active market for seed multiplication is available. Moreover there is a lack of distribu-
tion appointed biological transformation, because seed cannot be dealed in this production
stage. In proportion to the other following production stages (treatment etc.) the agricultural
activity is circumstantial. Besides the terms of variety registrations and variety property rights
have to be observed .
Determining the assigned value for field stock according to IAS 41.12 as part of consoli-
dated balancing of accounts according to IAS/IFRS
IAS 41.12 requires the evaluation of field stock at the ascribable current value. IAS 41.8 de-
fines the ascribable current value as the amount at which contracting, expert contracting part-
ners independent from each other would exchange the assets. Since an active market for field
stock does not exist, the value has to be calculated according to the specifications of IAS
41.18ff. The assigned value required in this case by IAS 41 for field stock corresponds to the
economic utilization value. The economic utilization value represents an intermediate value
between cost value (expenditure charges) and capitalized earnings value (crop charges). The
economic utilization value is determined by applying standardized data. The economic utiliza-
tion value is calculated as follows:
Crop fruits are divided into output classes which reflect certain natural yield levels on the
regional level. The average yields for the division come respectively from the previous
year. The assumed prices are average prices of the fiscal year. These are net prices in
whose calculation average drying costs were considered. If there are divergent possibili-
ties for exploitation of individual crop fruits (for example, malting barley/feed barley), a
mixed price is assumed. To determine market performance, the establishment is assigned
to the relevant region and the output class determined for the crop fruit. Market perform-
ance can then be taken from the table "Output and costs of land utilization". If these are
market fruits entitled to premiums, then the average premium associated to the production
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 87 of 221
is taken from the special table within the standard contribution margins and added to
market performance. For the most part, this involves premiums for grain/corn, oil seeds
as well as protein plants. Basically, the premium entitlement is legally claimable every
June 30 (in Germany for grain, corn, oil seeds as well as protein plants) so that in these
cases activation of the premium in the context of IAS 41.34 is done on the balance sheet
date. IAS 41.34 ff is to be tested respectively for other premiums and the balancing of ac-
counts on Sept. 30, Dec. 31 and Mar. 31.
3. Direct costs
The costs of seed/planting stock, manure, pesticide as well as other costs (insurance) are
subsumed under direct costs. These costs are taken directly from KTBL data gathering of
the current year.
pro-rated increase of the modified contribution margin is to be made at 70%, with sugar
beets and potatoes at 50% and with corn at 60%.
- Direct costs
% rate
A biological asset is livestock or a living plant. Agricultural products are the fruits of the
company’s biological assets.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 89 of 221
Biological assets and agricultural products must be valuated at their attributable current mar-
ket value. The attributable current market value is based on the present location and condi-
tion, minus the estimated sales costs. The sales costs do not include transport and other neces-
sary costs, in order to provide a market with property assets. Profit or loss from initial entry
of a biological asset to the attributable current market value must be settled in equity capital,
not affecting net income, in accordance with IFRS 1.
Position content:
Field inventory of seed propagation also belongs to the unfinished biological assets. This is
only valid for self-propagation. In case of propagation by third parties the capitalization of in-
ventories is not applied.
Position content:
seed propagation sugar beets
seed propagation sweet corn
seed propagation cereals
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Stocks that are complete on the balance sheet key date, after machining or processing, and
which are to be sold in this condition, must be accounted for as finished goods (also basic
seeds).
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 90 of 221
Goods are property assets, which the company making up the balance has acquired and
wishes to resell without machining or processing.
Finished goods and services must be valuated with the lowest value from acquisition or
manufacturing costs and net sales value.
KWS regulations:
Valuation:
Calculation of the continued acquisition or manufacturing costs for finished goods and ser-
vices takes place analogous the method for work in process.
Reproducers’ settlement price (depending on type, seed form, country of growth and crop
year) plus the acquisition costs (e.g. freight, insurance costs and customs expenses) make up
the acquisition costs.
The production costs accumulating beside the acquisition costs must be considered.
Acquisition costs and production costs together make up the manufacturing costs.
Individual valuation is undertaken; special fictitious consumption sequences are presently not
supposed.
The acquisition or manufacturing costs may not be recoverable if stocks are damaged, entirely
completely or partially out of date or if their sales price has declined. Devaluation of stocks to
the net sales price normally takes place in form of individual value adjustment.
If the net sales value is lower than the continued acquisition or manufacturing costs, then
stocks must be valuated with the net sales value.
“Inventories are usually written down to net realisable value item by item...” (IAS 2.29)
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 91 of 221
According to past experience, the following inventories must be at least written down:
Qualitative Write-down:
Inventories with a germination < 90% (to be proved by the germination test of the winter prior
to the valuation date) are to be written down by 100%. Untreated inventories may be shown in
the balance sheet at the current price of consumable corn, provided that those inventories are
usable as consumable corn.
A write-down can be abandoned in the case that a mixture with other inventories of higher
quality (e.g. new crop) is possible and allowed and a germination of at least 90% after the
mixture is to be expected. A respective confirmation in written form is to be centrally solic-
ited at the production department (MA-P). Would this confirmation not be on hand at MA-P
until one month after the due date, a measurement not in accordance with the guideline, can
be realized.
Quantitative Write-down:
Inventories at a very high reach of stocks (so called "Slow Mover") are to be written down
quantitatively. The reach of stocks is measured according to the budget resp. midterm plan-
ning at the due date prior to the last spring (shown in the “BMS-System” of the division corn).
In the case that a sales planning on the level of varieties does not exist, the sales data of the
last-mentioned period is to be continued unchanged.
25%
Inventories which are projected onto the 3rd day after the valuation date
50%
Inventories which are projected onto the 4th day after the valuation date
100%
Inventories which are projected onto the 5th day after the valuation date
Example:
Variety "X" is available on stocks as at 30.06.01 with 10.000 units. According to crop estima-
tion 5000 units will still be produced during calendar year 2001. Production during the fol-
lowing years is not planned.
The budget forecast for the mid-term period provides sales figures as follows:
Sales figures for the season 2005/2006 on the level of varieties do not exist. That is the reason
why the sales volume which had been planned for 2004/2005 is updated unchanged.
Stocks per variety resulting from this calculation presumably are as at:
Solution:
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1) X X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 93 of 221
Balance sheet entry of trade receivables and other receivables values takes place according to
IAS 32 in connection with IAS 39 (particularly IAS 39.19).
The dominant classification criterion is conform with the “debtor’s party” and the term for ac-
counts receivable (residual term up to 1 year and exceeding 1 year).
The actually expected payment receipt, even if this will exceed the contractually agreed pay-
ment deadline, is authoritative for calculation of the residual term.
Receivables in foreign currency must be converted by means of the conversion rate valid on
the balance sheet key date. Currency conversion rate differences must be recorded as expendi-
ture or revenue in the accounting period in which they have accrued (IAS 21.15).
Besides, lump sum valuation allowances have to be set up on basis of experiences. The basis
is therefor the default rate of the last three years (average percentage rate).
1. financial investments to be held up to the final maturity (see other financial assets)
2. credits (see loans) and receivables issued by companies
3. financial assets available for sale (see securities)
4. financial assets held for trading purposes (see securities).
Offsetting of financial asset values against financial liabilities (IAS 32.33 ff)
Offsetting of financial asset values and liabilities and specification of net amounts in the bal-
ance sheet must take place, if a company
a) has a legal claim to charge the recorded amounts off against each other; and
b) intends to either effect settlement on a net basis, or, via utilisation of the respective prop-
erty asset, tries to simultaneously redeem the corresponding liabilities.
An individual case examination must always be carried out on settlement and must, where
appropriate, be specified in the annex.
Short-term receivables are normally not to be discounted (IAS 39.111. line 3). Long-term re-
ceivables must be checked for fixed terms. It must be checked whether a fixed term is speci-
fied for long-term receivables. On existence of a fixed term, the respective receivable must
continue to be discounted (IAS 39.73). If a term has not been determined; then the receivable
must continue to be valuated with the acquisition costs.
All financial assets must be checked for signs of diminution in value in accordance with
the provisions from articles 109-119. This must be recorded, affecting net income, in the
result of the accounting period.
If a contingent asset exists according to IAS 37.31 and the following, it has to be shown in the
annex.
KWS regulations:
The respective position content and valuation is more closely described with the description
of the individual positions.
The revenues corresponding to the receivables stated here must be accounted for as sales
revenue in the profit and loss statement.
All of the company’s asset values from sales and services must be accounted for here. Ful-
filment and performance of the sales and services in accordance with the contract is pre-
condition for display. The receivables displayed for here must be accounted for as sales reve-
nue in the profit and loss statement.
In DET position 13214000 short-term trade receivables with third parties are shown. In DET
position 13215000 long-term trade receivables with third parties are shown. With the follow-
ing subitems a receivable movement schedule can be prepared (this applies to version 100 as
well as 200!), so that the requirements of IFRS 7 (changes in receivables as well as valuation
allowances, time frames) are fulfilled.
For trade receivables which are depreciated and not overdue, the net book value has to be
shown, so after valuation allowances (depreciation). Trade receivables which are already
overdue and have not been depreciated by 100% are not requested in the time frames. Due to
this fact, the total amount of the time frames can be deviated from the net book value of the
trade receivables in the balance sheet.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 96 of 221
The following validations regarding valuation allowances on trade receivables with third par-
ties are working.
- P&L item 34422000 with the total of notes position 51124082 and 51125206
- Subitem 480 of balance sheet item 13214000 and 13215000 with P&L item 34412000
- P&L item 34412000 with notes position 51124092
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1) X X X X
Movement schedule in-
formation
Term X X X X
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
All of the company’s asset values from finance leasing must be accounted for here. Fulfilment
according to contract is precondition for display. The receivables displayed for here must be
accounted for as sales revenue in the profit and loss statement. At the moment in the KWS-
group only exists operate leasing which has to be indicated among trade receivables according
to the person of the debtor. In case of finance leasing the group management has to be in-
formed. Accounting takes place after checking and consultancy.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 97 of 221
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term X X X
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term X X X
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 98 of 221
Country
Region
Partner 1)
Movement schedule in-
formation
Term X X X
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
All not yet recorded receivables and other asset values must be accounted for here.
Receivables which are resulted from prepayments to multiplier have to be categorized as fi-
nance receivables. Consequently such facts have to be shown among “Receivables from other
receivables and other assets with third parties” (item 13234000). Because this prepayments
are short-term and do not serve the common business purpose they must not be shown
among loans with third parties.
Stamps and all types of tokens are allocated among other receivables and other assets and not
among cash and cash equivalents (IAS 7.6). Income which was generated from sale of these
tokens has to be shown among other operating income.
Receivables from other receivables and other assets with third parties (totals item 13234000)
split into the following position:
The receivables from other receivables and other assets with third parties have to be split into
so-called time frames in the company notes (pos. 51124020). Therefor the following subitems
are available:
For other receivables/other assets which are depreciated and not overdue, the net book value
has to be shown, so after valuation allowances (depreciation). Other receivables/other assets
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 99 of 221
which are already overdue and have not been depreciated by 100% are not requested in the
time frames. Due to this fact, the total amount of the time frames can be deviated from the net
book value of the other receivables/other assets in the balance sheet.
Position content:
Balance sheet entry of cash and cash equivalents takes place according to IAS 32 in connec-
tion with IAS 39.
2.2.3.1 Securities
IAS 39 regulates the accounting of all original (e.g. loans, securities, receivables and liabili-
ties) and derivative (e.g. forward contracts, options, swaps, futures and forwards) financial in-
struments. Exceptions according to IAS 39.2 are e.g. shares in subsidiaries, shares in joint
ventures and shares in associated companies. Definitions and examples for derivatives have to
be seen in the annex for IAS 39, A9 and the following.
The “tradings” must initially be entered with their acquisition costs, which correspond to the
attributable current market value of the rendered return service. With initial valuation of secu-
rities, the transaction costs must be included. Tradings are intended for short-term disposal in
order to generate profits from short-term fluctuations. They might be also a part of portfolios
for which indices exist on short-term profit taking in the younger past. After initial recorda-
tion, the securities must be valuated with their attributable current market value (fair value),
without deduction of the transaction costs that may have accrued during sale or alternative
disposal. Profit and loss from the valuation to the attributable current market value (fair value)
for securities held for trading purposes (tradings) must be accounted for in the result of
the accounting period (13312000).
The available-for-sale must initially be entered with their acquisition costs, which correspond
to the attributable current market value of the rendered return service. With initial valuation of
securities, the transaction costs must be included. Financial assets available for sale represent
the catchall element. It concerns of securities, which neither might be classified as “tradings”
nor as “held-to-maturity”. After initial recordation, the securities must be valuated with their
attributable current market value (fair value), without deduction of the transaction costs that
may have accrued during sale or alternative disposal. For these category, financial assets
available for sale, not affecting profits (13311000), unrealized profits and temporary losses
from valuation to the attributable current market value must be accounted for not affecting
profits in equity capital, in the position “other comprehensive income (OCI)“. Permanent
depreciations have to be entered affecting income and if necessary to be written-up affecting
income.
KWS regulations:
The item 13311000 securities: available-for-sale has to be entered with a subitem. The
subitems 300 external securities and 310 KWS SAAT AG securities are available.
Associate companies may only acquire shares of KWS AG with the express consent of the
Executive Board of KWs AG.
Financial derivatives which are used for hedging of business dealings fraught with risk (un-
derlying transaction) might be classified under specific premises as a covering transaction
(hedge). For a hedge a valuation unit is needed which consists of an underlying transaction
and a covering transaction. If no valuation unit exists the underlying and covering transaction
are to be valuated stand-alone. For the underlying transaction, this takes place depending on
its character with net book value (e.g. loans) or fair value (e.g. securities in curent assets). The
covering transaction has to be valuated exclusively with the fair value.
Fair value
As fair value, the current market value of an asset or a liability is identified. This corresponds
normally to the current market price or the replacement costs. For calculation of the current
market value an accepted valuation scheme might be underlain alternatively (e.g. discounted
cash flow method).
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 101 of 221
Hedging against valuta risks based on an obligation might be capitalized as fair value hedge
or cash flow hedge, IAS 39.87.
By compliance with the requirements for embedded derivatives according to IAS 39.11, the
financial headquarters is to inform imperatively. Examples for embedded derivatives are men-
tioned in the annex A30. of IAS 39.
Balance sheet entry of cash takes place according to IAS 32 in connection with IAS 39.
Stamps and all types of tokens are allocated among other receivables and other assets and not
among cash and cash equivalents (IAS 7.6).
Foreign currency holdings and currency credits at foreign credit institutions, which are due on
a daily basis must be entered according to the buying rate for foreign currency on the balance
sheet key date.
KWS regulations:
Position content:
Cash
Checks
cash at bank on current accounts
fixed-term deposit credits at banks
miscellaneous
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 103 of 221
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Deferred tax claims are the profits tax amounts, which are rebateable in future accounting pe-
riods and amounts resulting from:
1. deductible temporary differences;
2. the balance of not yet utilised taxl loss carry forward; and
3. the balance of not yet utilised tax credits carry forward.
Temporary differences are differentials between the book value of an asset value or an asset
value or debt in the balance sheet at its tax value.
Temporary differences can be:
1. taxable temporary differences, which represent temporary differences that lead to amounts
that are assessable during calculation of the income (fiscal loss) of future periods liable for
taxation, if the book value of the property asset is realised or the debt is satisfied; or
2. deductible temporary differences that lead to amounts that are as assessable during calcu-
lation of the result of future accounting periods liable for taxation (fiscal loss), if the book
value of the property asset is realised or a debt is satisfied.
The tax value of a property asset or a debt is the amount attributable to this property asset or
debt for fiscal purposes.
Deferred taxes must be entered on temporal differences, provided they have accrued without
affecting net income and provided their cancellation presumably leads to tax burden or relief
in future financial years. The quasi-permanent differences are also counted among temporal
differences.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 104 of 221
Deferred tax assets on temporal differences must be entered, provided their realisation is suf-
ficiently probable. They must also be entered on both tax loss carry forward and tax credits,
provided it is sufficiently probable that the tax advantage connected herewith can be real-
ised. Thereby the tax advantage is to valuate in the amount like a realization is possible in
the next five years.
Obligation to enter deferred taxes also exists, if temporal differences arise within the scope
of capital consolidation.
Deferred taxes must be valuated according to the anticipated valid tax rate at the time of
cancellation of the temporal differences. Deferred taxes must not be discounted. The book
value of deferred tax assets must be checked for recoverability on every closing key date
and, if necessary, must be subjected to irregular depreciation.
Current tax assets and current tax liabilities have to be offset according to IAS 12.71 if the
following premises are fulfilled:
1. the entity has a legally unforceable right to set off the recognized amounts and
2. the entity intends either to settle on a net basis , or to realize the asset and settle
the liability simultaneously.
Deferred tax assets and deferred tax liabilities have to be offset according IAS 12.74 if the
following premises are fulfilled:
1. the entity has a legally unforceable right to set off current tax assets against cur-
rent tax liabilities and
2. the deferred tax assets and the deferred tax liabilities relate to income taxes levied
by the same taxation authority on either
i. the same taxable entity or
ii. different taxable entities which intend either to settle current tax liabilities
and assets on a net basis, or to realize the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of def-
fered tax liabilities or assets are expected to be settled or recovered.
KWS regulations:
Deferred tax assets must be calculated for each balance sheet item.
Deferred taxes on tax losses carry-forward have to be capitalized mandatorily, if the follow-
ing preconditions are fulfilled:
- usage of tax losses carry forward according to local tax law is permitted
- positive results before taxes in the mid-term planning.
Deferred taxes have to be shown in the DET among position 14011000 and 36200000.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 105 of 221
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Disposals from payment means before the closing key date, as far as they become expenditure
(with the of receipt of goods or services, no financial assets), are displayed for a certain period
of time after the closing key date.
A certain period of time means that the period to which the expenditure must be allocated is
exactly determinable on the calendar.
Basically, advance payments from contracts, for which the contracting partner renders his re-
turn service in the subsequent financial year, e.g. advance payment of contributions, rent, in-
surance premiums or interest, must be entered in the balance sheet here.
KWS regulations:
none
Position content:
advance payment of contributions and fees
advance payment of rent
advance payments of motor vehicle tax
advance payment of insurance premiums
miscellaneous
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 106 of 221
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 107 of 221
2.5 Equity
In general
Equity capital is the residual amount of the asset values remaining after deduction of all debts
and is subdivided into:
subscribed capital (or share capital),
capital reserve,
revenue reserves,
accumulated profit1
difference between currency conversion and
other comprehensive income.
According to IFRS, special items under fiscal law must not be formed, due to strict separation
between accounting based on commercial law and accounting based on tax law.
KWS regulations:
A revaluation surplus must not be formed in the equity capital, since the fixed capital assets
are valuated according to the benchmark method, thus to historic acquisition or manufacturing
costs.
Public benefits for asset values are not treated as deferred items in a special item, but are de-
preciated on determination of the book value according to IAS 20.24. .
The development in the equity index must be described (reference to IAS 1.86).
1
also contains negative results (loss)
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 108 of 221
Equity index
in TLC
Subscribed Capital Revenue Accumulated Other Equity
income
payment of dividends 0
annual surplus X 0
other alterations 0
check: 0
The subscribed capital corresponds to the amount to which the shareholders’ liability is lim-
ited, i.e. the basic capital with a joint stock company or capital stock with a limited liability
company.
Special regulations (type of shares, proprietary shares, multiple voting rights and the like.) re-
garding the subscribed capital must be specified in the annex.
KWS regulations:
The share property if third parties (strangers to the KWS GROUP) must be specified.
Varying types of capital (preferential shares, multiple voting right shares must be specified.
Provided that the subscribed capital has not yet been fully deposited, it must be accounted for
as called capital in the KWS GROUP – as presented in the example below:
Example:
subscribed capital 500 T€
./. outstanding capital contributions 250 T€
= deposited capital 250 T€
+ called outstanding capital contributions 150 T€
called capital 400 T€
Called outstanding capital contributions (in the example 150 T€) must be accounted for as re-
ceivables on the assets side. Display takes place under the balance sheet item accounts receiv-
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 109 of 221
able from other receivables and other property assets, subdivided into subsidiaries, joint ven-
tures or towards third parties.
Alternative display of the outstanding capital contributions as special items on the assets side
must not take place.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
2.5.2 Reserves
Outstanding reserves are accounted for according to the following classification criterion:
Capital reserve (external origin) and
Revenue reserve (internal origin –from the result-)
Type and purpose of each reserve must be specified within the equity.
Capital reserves are deposited reserves, i.e. shareholders’ capital investments, as far as they
cannot be allocated to the subscribed capital. Capital reserves that must be particularly speci-
fied:
the amount attained in excess of the nominal value on issue of shares (issue–agio);
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 110 of 221
the amount of additional payments into equity made by shareholders, even if they are granted
special rights or merits for this purpose.
Development of capital reserves during the financial year must be presented in the statement
of shareholders´equity.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Amounts that are formed from the result during the financial year or a former financial year
are accounted for here. These may be legal, for own shares, statutory or other revenue re-
serves.
Type and purpose (legal, statutory and so forth) of each reserve must be specified within the
equity.
Development of the revenue reserves during the financial year must be presented in the eq-
uity.
KWS regulations:
none
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 111 of 221
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Legally stipulated reserves from the result must be accounted for here in accordance with the
respective regulation of state law.
KWS regulations:
Development of the legal reserves must be specified and explained in the annex.
In case the company holds own shares a reserve at the same rate has to be shown. This reserve
can be created chargeable to an excisting other profit reserve (recapitalization).
The reserve has to be liquidated so far as the assigned value of the own shares is reduced.
If the Articles of Association provide for formation of specific reserves from the result, the
use of which may possibly be limited, then these reserves must be accounted for.
KWS regulations:
All revenue reserves formed, via shareholders’ decision, during compilation of the balance
sheet or within the scope of the profit distribution must be accounted for here, provided pres-
entation under the already mentioned revenue reserves cannot be considered.
KWS regulations:
KWS regulations:
The reconciliation statement of accumulated profit of the previous year to accumulated profit
if the financial year must be presented in the statement of shareholders´ equity and, where ap-
propriate, specified in the annex.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 113 of 221
The accumulated profit / accumulated loss of the previous year has to be indicated as unap-
propriated retained earnings brought forward/cumulative losses brought forward.
The sum out of the result carried forward and the result of the current financial year amounts
to the accumulated profit of the current year before first consolidation.
This means a technical term which includes the net income before change of quota.
An annual financial statement compiled in foreign currency must be converted into the report-
ing currency (Euro) in accordance with the predetermined rates. Asset values and debts are
converted according to the rates on the balance sheet key date. The positions of the profit and
loss statement are converted according to the average annual rates. Exchange rate differences
resulting herefrom are accounted for in the equity capital, without affecting net income, under
the item “changes resulting from currency conversion”.
The conversion of foreign currencies into EURO will be made in Einbeck. All subsidiar-
ies inform only in local currencies.
KWS regulations:
Formation of the item “changes resulting from currency conversion” must be specified in the
annex.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Securities of fixed assets and current assets are valuated at market prices. The securities of
current assets and a proportion of securities of the fixed assets are categorised as “asset values
available for sale“. In this case, all not yet realised changes in market value (fair value) after
deduction of deferred taxes are accounted for, without affecting net income, within the equity,
under the item “other comprehensive income (OCI)“.
Translation of the term has been deliberately waived, since it is a generally accepted and
common term.
KWS regulations:
Formation of the item “other comprehensive income“ must be specified in the annex.
The total of subitem 620 and 625 of balance sheet item 21610000 and 21620000 is validated
with notes position 51190030 (Net amount of other comprehensive income after tax).
E.g.
- changes in revaluation surplus
- actuarial gains and losses on defined benefit plans
- gains and losses arising from translating the financial statements of a foreign operation
- gains and losses on remeasuring available-for-sale financial assets
- the effective portion of gains and losses on hedging instruments in a cash flow hedge
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 116 of 221
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
The item minority shareholder is an independent balance sheet item that represents neither
equity nor borrowed capital.
KWS regulations:
The equity of the minority shareholder is defined as the remaining balance of assets of minor-
ity shareholder after deduction of all liabilities and is subdivided into:
Thus, the interest of minority shareholder in equity is subdivided as explained under point 2.5
equity.
The accounting and valuation principles of borrowed capital must be specified in the annex.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 117 of 221
Offsetting of asset values and debts (e.g. receivables from and liabilities to one and the same
company) is only permissible where requested or explicitly permitted by the IAS. According
to IAS 32.33, offsetting must take place if a legal settlement claim exists. In this case realisa-
tion of asset value and liability or settlement on a net basis is possible.
KWS regulations:
The respective balance sheet items of borrowed capital must be subdivided into their most
important integral parts.
Stocks from intra-group business connections must also be stated and specified. This particu-
larly concerns debts towards subsidiaries, joint venture and associate companies.
If a contingent liability exists according to IAS 37.27 and the following, it has to be shown in
the annex.
Long-term in terms of the IAS basically means a residual term exceeding one year after the
balance sheet key date. Financial liabilities are entered with their acquisition costs on initial
recordation. Possible transaction costs must hereby be included. In subsequent accounting pe-
riods, financial liabilities must be valuated according to continued acquisition costs. Sole ex-
ceptions are liabilities that are held for trading purposes and derivative financial instruments
according to IAS 39.93. These must be shown in the balance sheet with their attributable cur-
rent market value. The amount concerned is appropriate for possible exchange of asset values
or settlement of liabilities between experts, persons willing to conclude contracts and inde-
pendent business associates.
Interest-bearing liabilities with a residual term of one year must be classified as long-term, if
an issue according to IAS 1.63 exists, e.g. if the original term of the liabilities exceeds one
year.
KWS regulations:
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 118 of 221
All items, particularly the intra-group assets, must be sufficiently presented and specified in
the annex. With bank credits, essential individual items (amounts exceeding 100 T€) must be
stated separately with the name of the bank.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Obligations with a determined degree of obligation and a determined amount must be entered
as liabilities. It is thereby irrelevant whether the liability is of an economical or legal nature.
An obligation can only be entered in the balance sheet in the event of liability towards exter-
nal third parties. Internal obligations cannot be shown as liabilities.
Existence of a long-term liability and how this is to be entered in the balance sheet in subse-
quent on initial recordation and in subsequent accounting periods has already been explained.
Liabilities in foreign currency must be recorded according to the transaction rate (at the time
of accrual of the liability). These liabilities must be entered in the balance sheet on the balance
sheet key date, according to the fair value – the attributable current market value – and must
subsequently be converted into Euro.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 119 of 221
KWS regulations:
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1) X X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Here all liabilities from finance leasing of the company have to be indicated. The specific per-
formance is required for the statement. The liabilities indicated here have to be registered as
expenses in the profit and loss account. At the moment in the KWS-group only exists operate
leasing which has to be indicated among trade receivables according to the person of the
debtor. In case of finance leasing the group management has to be informed. Accounting
takes place after checking and consultancy.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 120 of 221
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
The other long-term liabilities with subsidiaries, joint ventures and associated companies have
to be indicated detailed in the annex. In case of other long-term liabilities and other long-term
liabilities with third parties substantial single items (amounts above 100 T€) have to be indi-
cated separately.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 121 of 221
Note: The distribution in long-term provisions I and long-term provisions II was made
because of technical reasons.
Among accruals for income taxes all taxes for the current financial year as well as open peri-
ods of tax audit have to be indicated, for which the company is taxpayer and for which no as-
sessment has been made (see IAS 12.12). Assessed taxes have to be recorded as short-term
tax liabilities.
For the set-up of tax accruals for prior years, e.g. due to a tax audit, the expenses have to be
shown as tax expenses and not as non-periodic expenses.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
2.7.1.5.2 Provisions for pension and similar obligations (long-term provisions II)
Method, a cash entitlement procedure. Beside the demographic assumptions, the discount fac-
tor, salary and pension development, increase in expenditure for costs of illness and antici-
pated revenue from planned assets are thereby takes as a basis. The capital market interest
rate, valid on the balance sheet key date, for first-rate, fixed interest-bearing industrial or gov-
ernment bond issues must be applied. Entry of actuarial profit and loss takes place on the ba-
sis of the corridor method (10%-corridor). According to IAS 19.92 a part of the actuarial
gains and losses shall recognize as income or expense if the net cumulative unrecognized ac-
tuarial gains and losses at the end of the previous reporting period exceeded the greater of:
• 10% of the present value of the defined benefit obligation at that date (before deduct-
ing plan assets); and
• 10% of the fair value of any plan assets at that date.
All commitments must be included as a liability. So-called old and new commitments are no
longer differentiated between.
Jubilee funds, special leave for long service and occupational disability benefits are counted
among the other due payments to employees (similar obligations). These must be recorded
in other provisions.
Provisions for deferred compensation have to be balanced with the receivables towards the in-
surer. The remaining difference have to be shown in the balance sheet and have to be ex-
plained in the annex.
KWS rule:
As per June 30 of ones year, pension expert opinions have to provide together with the annual
report to the group accounting.
Basically accruals for pensions have to be classified as long-term even if they will be paid
within one year. For this reason existing short-term accruals for pensions have to be reclassi-
fied with subitem 535 as long-term as per June 30, 2006.
The interest component of the pensions allocation has to be shown separately with subitem
512 and is equal to the p&l item 35270000 “interest expenses accruals for pensions”.
According to IAS 19.24 you have to differentiate between defined contribution plans and de-
fined benefit plans. Due to these fact the following notes have to be done in the year-end an-
nex on company level:
Definitions
Plan assets
Plan assets comprise assets held by a long-term employee benefit fund and qualifying insur-
ance policies.
Experience adjustments
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 124 of 221
Adjustments, which are arisen out of the difference between prior actuarial assumptions be-
yond the prospective development and the actually development.
Interest cost
Interest cost is the increase during a period in the present value of a defined benefit obligation
which arises because the benefits are one period closer to settlement (notes position
51182070, P&L position 35270000).
Fair Value
Fair value is the amount for which an asset could be exchanged or a liability settled between
knowledgeable, willing parties in an arm’s length transaction.
Valuation:
Determination of the percentage rates for interest rate, increase in salaries and pensions, cost
increase in expenditure for costs of illness must take place according to the country-specific
previous year’s change and the future developments.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Calculation method
The “Projected Unit Credit Method (PUCM)” is the prescribed valuation method according to
IAS 19, which is the system of single premium financing for the annual benefit increment in
consideration of trends.
For pensioners and retired persons with vested benefits the DBO complies with the present
value of prospective provision services in consideration of a prospective pension trend.
3. Interest Cost
The interest cost corresponds to the annual interest rate of the calculated DBO at the begin-
ning of the fiscal year in consideration of the mature benefit payments for less than a year.
5. Amortization Items
Actuarial gains and losses are amortized as a result of the deviation of the actual movement to
the expected assumptions or by changing of these assumptions. For pension provisions, the
part of actuarial gains and losses has to be amortized at least to the average residual period of
service of the active employees which exceed 10% of the DBO at the end of the prior report-
ing period.
6. Curtailment/Settlements
Curtailments and settlements have to be considered.
7. Transfer payments
Transfer payments are the balance of asset transfers resulting from changing the subjection of
individual subsidiaries within the group.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 126 of 221
Basis of calculation
The calculation assumptions and valuation methods at the beginning and end of the reporting
year can be summarized as follows:
As actuarial retirement age, the advanced retirement age were used according to the German
social security law from 2007.
For the entry of actuarial gains and losses the company uses the so-called “corridor”-method
according to IAS 19.92-93.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 127 of 221
The movements of the provisions for fiscal year 2006/07 are as follows:
2.7.1.5.3 Provisions for restoration third party properties (long-term provisions II)
Note: The split into long-term provisions I and II was made because of technical reasons.
To form an accrual for restoration expenses the general requirements for balancing an accrual
as well as the requirements according to IAS 37.72 have to be fulfilled. For the assessment
only those expenses directly connected with the restructuring and therefore arising compulso-
rily are to be taken into consideration and not hose expenses connected with current activities
of the company (redundancy expenses against employees).
In case of expenses for future business as re-education all transfer of employees, marketing
activities or capital expenditures in new systems and distribution networks an accrual cannot
be formed (IAS 37.81).
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 133 of 221
Provisions for uncertain liabilities (according to merits and/or amount), i.e. if an uncertain ob-
ligation towards a third party has legally originated or was economically caused (nature of li-
abiltiy), must be formed.
With long-term provisions, the amount to be paid must be compounded via foreseeable cost
increases and subsequently discounted to its actual cash value via a market interest rate. Long-
term in terms of the IAS is a residual term exceeding one year after the balance sheet key
date.
The probability of outflow of funds must be taken as a target when forming provisions. The
accrual must be reliably appraisable; if necessary, statistic estimation forms the measure of
value.
KWS regulations:
The provisions must be subdivided into their essential elements and must be presented in an
provisions movement schedule. The provisions (except the net pension provisions) must also
be structured according to maturity, as follows:
Tax
Reorganisation
Others
0 0 0 0 0 0 0
Column addition: with long-term provisions, addition at actual cash value only
Column reversal: only to be considered, if the reason for formation of provisions
is inapplicable or if the provision has been too highly assessed
Column interest in-/decrease: interest part of provision increase/decrease – calculative a per-
centage of the opening balance
Column consumption: basically to be considered resulting neither in profit or loss
Provisions for liabilities towards subsidiaries, joint ventures and associated companies must
be stated and specified separately.
Individual provisions exceeding 100 T€ must be specified separately in the annex as regards
their nature and valuation.
The methods of proceeding for valuation of provisions, e.g. cost increase rate, discount factor,
inclusion of certain costs, and must also be specified in the annex.
Examples for the acceptance of economic cause up to the balance sheet date (according to
IAS 37):
• Guaranteeing
• Bonuses to employees
• Projected anniversary bonuses
• Commitments for commissions (only commissions which are already arised)
• Paybacks for hires
• Vacation commitments
• Land rent
• Royalties
• Travelling expenses
• Waste disposal
• Fees for year-end audit and preparation of the tax declaration
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 135 of 221
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Short-term in terms of the IAS basically means a maximum residual term of one year. Finan-
cial liabilities are assessed according to their acquisition costs on initial recordation. Possible
transaction costs must be included hereby. In subsequent accounting periods, financial liabili-
ties must be valuated according to continued acquisition costs. Sole exceptions are liabilities
that are held for trading purposes and derivative financial instruments according to IAS 39.93.
These must be entered in the balance sheet with the attributable current market value. The
amount concerned is appropriate for possible exchange of asset values or settlement of liabili-
ties between experts, persons willing to conclude contracts and independent business associ-
ates.
A liability must always be classified as short-term, if its amortisation takes place within the
financial year or one year after the balance sheet key date at the very latest. Exceptions from
this rule may be extracted from standards 1.61 to 1.65, e.g. liabilities with an original term of
several years.
Liabilities in foreign currency must be recorded according to the transaction rate (at the time
of accrual of the debt. This liability must be balanced on the balance sheet key date in accor-
dance with the fair value – the attributable current market value and subsequently converted
into Euro.
This position has already been explained factually among the long-term interest-bearing loans
and the short-term borrowed capital.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 136 of 221
Prepayments received for stocks must not be deducted from stocks, but must be shown
among short-term finance liabilities (see page 80).
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Trade payables have been already explained factually among the position long-term trade
payables. The sub-positions are identical as well. If trade payables with a duration of more
than one year exist they will have to be indicated among the long-term borrowed capital under
position long-term trade payables.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 137 of 221
Partner 1) X X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Liabilities from finance leasing have been already explained factually among the position
long-term liabilities from finance leasing. The sub-positions are identical as well.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1) X X X
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Taxes already assessed have to be indicated among the position short-term tax liabilities.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 138 of 221
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Among other short-term liabilities substantial single items (amounts above 100T€) have to be
indicated separately.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Note: The distribution in long-term provisions I and long-term provisions II was made be-
cause of technical reasons.
Provisions have been already explained factually among the position long-term provisions.
The sub-positions are identical as well.
For the set-up of tax accruals for prior years, e.g. due to a tax audit, the expenses have to be
shown as tax expenses and not as non-periodic expenses.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
- short-term provisions for restoration third party properties (short-term provisions II)
Balance sheet item 24623000 (other short-term provisions) has to be split in the following
three items:
- 24623000 (other short-term provisions from sales transactions)
- 24623010 (other short-term provisions from purchase transactions)
- 24623020 (other short-term provisions from other transactions)
This means that the provisions have to be divided into the different transactions. The carry
forward is shown among item 24623000 (sales transactions). If the carry forward is also re-
lated to purchase and/or other transactions, please transfer the corresponding amount by using
subitem 535 (same procedure like subitem 140 for fixed assets).
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X
Profit Center X X X
Country
Region
Partner 1)
Movement schedule in- X X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Deferred tax liabilities must not be formed for issues of the regulations IAS 12.15 and
IAS 12.39. The recoverability of deferred tax claims must be checked anew on every balance
sheet key date. Offsetting of deferred taxes is strictly prohibited. Deferred tax claims and tax
provisions must not be discounted. On valuation of latency, the tax rates that are valid or an-
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 141 of 221
nounced on the balance sheet key date must be applied. Deferred taxes must be recorded af-
fecting net income, with the exception of:
- business transactions that are directly entered in equity, or
- mergers in form of company acquisition.
Deferred taxes are normally also cancelled affecting net income.
KWS regulations:
The item “deferred taxes“ must be sufficiently specified and presented in the annex.
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in- X X X
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
Proceeds (= payments) prior to the closing key date must be accounted for here, as far as they
present revenue for a certain period after the closing key date.
“A certain period“ means that the period to which the revenue can be allocated is determin-
able on the calendar.
Accrued items (proceeds/payment prior to the balance sheet key date) must be recorded as
miscellaneous receivables and other asset values.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 142 of 221
Advance payments from mutual agreements, for which the accounting party renders his return
service in the next financial year, may be entered in the balance sheet here; e.g. received ad-
vance payments for rent or interest.
KWS regulations:
Essential positions (amounts exceeding 50 T€) must be stated and specified separately.
Position content:
- advance lease payment
- miscellaneous
Data entry:
Additional information/ Version 100 2) Version 200 3) Version 300 3) Version 400 3)
Version
Company X X X
Profit Center
Country
Region
Partner 1)
Movement schedule in-
formation
Term
1) A partner information is required for consolidated affiliated companies
2) In version 100 the data will be required for the complete movement schedule
3) Only a simplified movement schedule will be required for the versions
200, 300 and 400 which consist of the opening balance, additions and disposals
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 143 of 221
- Use of gross margin subtotals for examination of gross margins for variety or seed form
gross margins (gross margin 1) and country/region gross margins (gross margin 2).
-> Statement of research and development costs in the internal reporting system as a
separate function (acc.: sales, administration), while in external accountancy, R&D costs
appear among manufacturing costs.
-> Use of standard manufacturing cost rates in internal accountancy for KWS SAAT AG
and KWS Mais GmbH instead of (to some extent, this also refers to other companies).
-> Within internal accountancy, any other operating income are listed within the functions of
Production, Sales, Research & Development and Administration, as far as they can be
allocated to these departments (e.g. income from R&D subsidies are listed in the item
"Research & Development income"). In the external approach, this item is allocated to "other
operating income".
In the COSM, expenditures are not broken down according to expense types (as in the Total
Cost Method (TCM), but organized according to functional divisions (production costs, sales,
research, development and administrational costs).
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The individual items of the profit and loss statement must only include factually incurred
expenses and income.
Detailed references in the enclosures based on the cost-of-sales method are to be taken into
account according to IAS 1.83 und IAS 1.84.
34111000 Sales
34112000 ./. Cost of sales
34110000 = Contribution margin 1
34120000 ./. Selling expenses
34100000 = Contribution margin 2
34200000 ./. Research & Development expenses
34300000 ./. Administration expenses
34400000 +/./. Other operating income and expenses
34500000 ./. Alternative valuation of goods / devaluation and annihilation of
stocks
34000000 = Operating result IFRS
35000000 +/./. Financial result
33000000 = Result from ordinary activities
36000000 ./. Taxes
37000000 +/./. Income and expenses from profit and loss transfer agreements
32000000 = Result after taxes
38000000 +/./. Extraordinary result
31000000 = Net income
2.11.1 Sales
Proceeds from the sale of typical products within the framework of ordinary business opera-
tions have to be entered under this item (applicable standard: IAS 18).
There is the obligation to make a net statement, i.e. proceeds reductions (refer to IAS 18.10.)
and turnover tax have to be deducted.
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Gross sales proceeds (for finished and unfinished products, by-products, invoiced
packaging and freight costs, waste products if applicable)
./. Reductions of proceeds (cash discounts, rebates, credits)
./. Turnover tax (similar, sales-dependent taxes, if applicable)
= Net sales proceeds
The total of all sales proceeds in added up from the following items:
- Sales proceeds from external third parties, i.e. customers outside the KWS scope of
consolidation.
- from consolidated, affiliated companies, i.e. sales proceeds from customers included
in the consolidated annual accounts of the KWS-Group as fully consolidated affiliated
companies. -> in Version 100. service relationships Company <-> Company-> in Ver-
sion 200-400 Service relationships Profit Centre <-> Profit Centre
- from unconsolidated affiliated companies, i.e. sales proceeds with companies which
are affiliated, but not included in the consolidated annual accounts of the KWS-Group.
Sales proceeds are entered in the decentralised entry tool with the following supplementary
information.
All sales proceeds from the sale of certified seeds, experimental seed and merchandise are en-
tered here by company and/or profit centre, with country or region and partner.
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Applicable for: KWS Italia, KWS France, KWS Chile, KWS Türk
For the multiplication of commercial sugarbeet seeds, sales with profit center 1000ZR-ZR
(KWS SAAT AG) have to be allocated to region AARDUMMY in version 200. This is only
allowed in that special case!
All sales proceeds resulting from the grant of marketing rights for our own species to affili-
ated companies or external third parties are entered here by company and/or profit centre,
with country or region and partner (licence fee for breeders).
All sales proceeds from the sale of basic seeds are entered here by company and/or profit cen-
tre, with country or region and partner.
Here, sales proceeds from breeding services are shown, which are performed within the
KWS-Group. For example, sales which KWS-France obtained with breeding services per-
formed for KWS SAAT AG (and invoiced to KWS SAAT AG) are to be entered here.
Also breeding services performed for external third parties, e.g. the breeding services by
AgReliant for Limagrain, have to be entered here.
All sales from tech-fee (right of use for GMO) are shown here.
KWS regulations:
Special regulation (temporary) for internal allocation of sales tech-fee for division sugar beet.
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The allocation of tech-fee for sugar beet seed takes place according to the executed input of
research and development for ¾ to the segment research and services. Correspondingly ¼ of
the tech-fee is attributed to the distribution service in the respective market. Proportional
R&D input has to be considered in the corresponding market region.
Other sales proceeds are, by way of example, defined as business transactions as below:
In keeping with character and purpose of the cost of sales procedure, this item is to include
manufacturing costs of the products sold and the services billed.
The term “manufacturing costs of sales” in the sense of the cost of sales procedure is subject
to rather vast interpretations in the KWS-GROUP. It includes any and all expenses incurred
during manufacturing the products sold.
For the companies KWS SAAT AG and KWS Mais GmbH (possibly additional companies in
future as well) the planned standard rates of manufacturing costs are budgeted under Actual
(sold quantity x standard rate of manufacturing costs). These standard rates and actual ex-
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penses are reconciled in the line “Deviation, cost of materials, STANDARD from ACTUAL
(refer to 2.11.9,1, page 108).
All other affiliated companies enter the actual cost of materials for certified/commercial
seeds under the following items - a reconciliation in the line “Deviation, cost of materi-
als, STANDARD from ACTUAL” as mentioned above is not required. If separation into
the items seed, dressing and packaging is not possible, the entry is made under item
„34112110 input of goods, certified seeds“.
Many affiliates buy finished, certified/commercial seeds. These will be entered there under
“Input of goods, ZS-seed" (refer to the allocation indicated below).
The totals line “Cost of materials, certified/commercial seed” includes the following individ-
ual items:
Data entry:
Here, the respective costs of materials for basic seeds are entered, as opposed to the sales of
basic seeds for the period.
Data entry:
Country X X X
Region is derived from is derived from is derived from
the country the country the country
Partner
Licence fees have to be paid on the sale of species based in whole or in part on the genetics of
third parties or TBG’s. They are entered under this item.
Data entry:
All expenses for tech fees (fees for the right of use, genetically modified properties of plants)
were recorded here.
If a discount for an early payment of trait royalty expenses is given, this discount has to be
shown as a reduction of trait royalty expenses and not as an other operating income.
The manufacturing costs item is divided into the items “expenses, production” and “proceeds,
production, other”.
Cost centre areas and/or cost centres within the production function (Examples):
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Manufacturing: Incoming goods, drying, cleaning, treatment, pilling, enhancement with active
agents, packaging, storage, outgoing goods.
Production management
Data entry:
Whether and to which extent allocation to regions will take place here, is currently being
agreed/decided in the sweet corn division (result expected for the next 1-2 weeks)! The same applies
to the following functional costs items!
All proceeds generated in connection with the production function are entered here. For ex-
ample proceeds from leasing production machines.
Data entry:
Other manufacturing costs are, by way of example, defined as business transactions as below:
Data entry:
All expenses incurred during the financial year in connection with marketing the goods and
services produced (seed and services) are entered as selling expenses.
Sellingg expenses are, just like manufacturing costs, determined by distribution of the differ-
ent types of costs to cost centres/functions.
Cost centre areas and/or cost centres within the selling function (examples):
Sales: Sales management and departments (secretary’s offices included), consultation of-
fices, Agroservice.
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Data entry:
Partner
All proceeds generated in connection with the selling function are entered here. For example
the proceeds from recharging an advertising campaign to another company of the KWS-
Group.
Data entry:
The item research & development is divided into the following items: “research & develop-
ment expenses” and “income from research & development".
Invoices from breeding stations to group companies have to be calculated on the basis of
IFRS and not on the basis of local rules.
Cost centre areas and/or cost centres within the research & development function (exam-
ples):
Data entry:
R&D costs are only entered by regions in the profit centres FE-MA and FE-ÖF, and only for
KWS SAAT AG.
All proceeds generated in connection with the research & development function are entered
here. For example the proceeds from grants for research projects and by-products.
Data entry:
1) R&D proceeds are only entered by regions for the profit centres FE-MA and FE-ÖF.
The item Administration is divided into the items “administration expenses” and “other ad-
ministration income” as below:
All activities in connection with the direction /management of the company as well as com-
mercial and general/technical functions across the company.
Cost centre areas and/or cost centres within the administration function (examples):
Data entry:
1) Administration expenses are only entered by regions for the profit centres FE-MA and FE-
ÖF.
All proceeds generated in connection with the administration function are entered here. For
example proceeds from the performance of administration services (e.g. re-charging of ad-
ministration services for AgroMais GmbH).
Data entry:
1) Administration proceeds are only entered by regions for the profit centres MA and ÖF.
Facts which were shown in the past as extraordinary expenses or income are now a part of the
other operating expenses or income.
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This item serves as summary item for income (e.g. within functions) which are not shown un-
der other income items. It also contains income from other periods.
Other operational income from business relations with affiliates, joint ventures and associated
companies have to be identified and explained separately for each company.
Income by/from affiliates, joint ventures and associated companies have to be reconciled for
each company. This process has to be initiated by the company showing the income in its fi-
nancial statements. The company showing the expenditure has to identify in the correspond-
ing items of the profit and loss statement, how the corresponding expenditure has been
booked by it.
Furthermore the income from the reversal of valuation allowances on receivables are a part of
the other operating income. Normally, they arise from payment receipts of already devaluated
but not written off receivables.
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Data entry:
1) Other miscellaneous income are only entered by regions for the profit centres MA, FE-MA,
ÖF and FE-ÖF.
The item other operating expenses is divided into the following items: “other miscellaneous
expenses” and “write-offs and valuation allowances on debts ":
This item only contains expenses which cannot be allocated to the functional areas (other
miscellaneous expenses), i.e. especially expenses for other periods and neutral expenses has to
be entered here.
Expenses for other periods has to be identified and explained in the Notes.
Data entry:
1) Other miscellaneous expenses are only entered by regions for the profit centres MA, FE-
MA, ÖF and FE-ÖF.
Data entry:
The item “Deviation, cost of materials, STANDARD from ACTUAL ” is only relevant
for companies applying standard rates of manufacturing costs in their ACTUAL state-
ment - currently KWS SAAT AG and KWS Mais GmbH.
The item “Deviation cost of materials, STANDARD from ACTUAL” shows the reconcilia-
tion between actual expenses of financial accounting (the item “Cost of materials against AC-
TUAL") below, and the standard costs recorded under manufacturing costs.
The two items below are only relevant for companies utilising standard manufacturing costs
for their manufacturing costs (e.g. KWS SAAT AG, KWS Mais GmbH).
Cost of material actually booked by financial account is recorded here. These are composed
of:
Data entry:
Standard costs recorded under manufacturing costs are recorded here as “contra item” against
actual values.
Data entry:
Implemented depreciations and destructions of stocks are recorded in this item line.
Data entry:
1) Depreciation and destruction of stocks is only entered by regions for the profit centres
MA and ÖF.
The operating result IFRS is derived from the following items of the profit and loss statement:
Contribution margin 2
./. Research & Development
./. Administration expenses
+/./. Other operational proceeds and expenses
./. Alternative valuation of goods ZS and Depreciation/destruction of stocks
= Operating result IFRS
- Financial result
- Taxes
- Income and expenses under profit and loss transfer agreements (EAV) and
- Extraordinary result
Dividends and shares in the profit of subsidiaries and joint ventures have to be shown here in
particular.
Income has to be shown as gross income, i.e. including creditable taxes on income.
Income from subsidiaries and joint ventures under the KWS SCOPE OF CONSOLIDATION
has to be identified and explained separately for each company.
Data entry:
Dividends and shares in the profit of associated companies have to be recorded here in par-
ticular. Furthermore, pro-rata annual surpluses, which have not been distributed yet but are to
be allocated to the Group are shown here. This is done in the consolidated annual account
only, not the individual annual accounts of the companies.
Income has to be shown as gross income, i.e. including creditable taxes on income.
This income has, as per IAS, to be identified as a separate item 28.28 in the profit and loss
statement and explained in the Notes.
Income from associated companies under the KWS SCOPE OF CONSOLIDATION has to be
identified and explained separately for each company.
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Data entry:
Dividends and shares in the profit of companies, in which shares are held, have to be recorded
here in particular.
Income has to be shown as gross income, i.e. including creditable taxes on income.
Data entry:
Income from profit transfer agreements or similar agreements has to be recorded here for the
parent company. Income from profit pools has to be recorded here as well.
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Data entry:
As the depreciation of value has been recorded in the past with an effect on results, the write-
up (value made up for) has to show an effect on results as well. However, the write-up must
not exceed the acquisition costs carried on. When indications for a write-up are present, the
Group management has to be informed and the write-up may only be recorded upon agree-
ment.
Data entry:
Depreciations on subsidiaries and joint ventures are to be recorded here. They may only be
recorded as extra-budgetary depreciations on the basis on an impairment test and upon agree-
ment with the Group management.
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Depreciations are to be shown separately for each company and have to be explained in the
Notes.
Data entry:
Supplementary info Version Version Version Version Version
/ 100 200 200 300 400
Version (6+12) (3+9)
Company X X X
Profit Centre
Country
Region
Partner
Write-downs on participations of financial assets have to be recorded here. They may only be
recorded as extra-budgetary depreciations on the basis on an impairment test and upon agree-
ment with the Group management.
Write-down are to be shown separately for each participation and have to be explained in the
Notes.
Data entry:
Losses to be taken over by the parent company under profit and loss transfer agreements dur-
ing the financial year have to be recorded here.
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Data entry:
The amount of reversal of badwill of fully consolidated companies is recorded here. Joint ven-
tures are treated as fully consolidated companies in this context. Badwill is an adjustment item
of capital consolidation to be entered under the liabilities side.
Data entry:
Data entry:
The amount of reversal of badwill in equity consolidated companies is recorded here. Badwill
is an adjustment item of capital consolidation to be entered under the liabilities side.
Data entry:
The values from business relations with affiliates, joint ventures and associated companies
(refer to Chapter I, KWS SCOPE OF CONSOLIDATION) included in the individual items
have to be recorded separately (partner information).
Proceeds from items representing business relations with affiliates, joint ventures and associ-
ated companies have to be reconciled for each company. This process has to be initiated by
the company showing the proceeds in its financial statements. The company showing the ex-
penditure has to identify in the items of the profit and loss statement, how the corresponding
expenditure has been booked by it.
All interest and similar income not referring to financial assets are to be recorded here.
Income from interest or dividends from securities under current assets has to be recorded here
as well.
Income has to be shown as gross income, i.e. including allocatable taxes on income.
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Income from affiliates, joint ventures and associated companies, e.g. interest from settlements
of fixed term deposits, has to be identified separately in the Notes.
Content of item:
(1) Interest and dividends from securities under current assets
(2) Interest from deposits with credit institutions (banks)
(3) Interest from short and medium term loans and accounts receivable to affiliates, joint
ventures and associated companies
(4) Income from discounts
(5) Other, e.g. interest on loans shown in the item accounts receivable and other assets.
Interest and similar income from affiliates, joint ventures and associated companies have to be
identified and explained separately for each company (partner information).
Data entry:
Expenses towards affiliates, joint ventures and associated companies have to be identified
separately in the Notes.
Content of item:
Interest and similar expenses of affiliates, joint ventures and associated companies have to be
identified and explained separately for each company (partner information).
Data entry:
Income from the disposal/sale of securities of current assets has to be recorded here.
Data entry:
2.13.2.4 Income from other securities and loans of financial assets (35240000)
Income from all items of the financial assets, except income from the balance sheet item
“Shares in subsidiaries, joint ventures, associated companies and shareholdings” have to be
recorded here.
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Income from the periodic appreciation (write-up) of unaccrued interest on discounted long-
term loans of financial assets have to be recorded here as well.
Income has to be shown as gross income, i.e. including allocatable taxes on income.
Data entry:
Data entry:
Write-ups on securities of current assets have to be recorded here, if the reason for deprecia-
tion has ceased to exist later. The write-up may not cause the security to exceed the projected
acquisition costs which would have occurred, if no extra-budgetary depreciation had been per-
formed (IAS 39.114). Write-ups for the individual securities have to be explained in the
notes.
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Data entry:
This subtotal represents the result from ordinary activities, i.e. all activities undertaken by a
company within the framework of its business operations, as well as related activities under-
taken by the company in order to promote such activities, accruing as additional activities or
as a consequence of such activities. Expenses and income which is ordinary by origin but very
important by amount, type or cause of accrual have to be shown separately in the notes to the
financial statement.
This item represents a subtotal similar to the setup of the profit and loss statement as per IAS,
and is composed of the following items:
- Result from ordinary activities
- Taxes
- Profits transferred under profit and loss transfer agreement
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According to IAS 1.75 and IAS 12.77, tax expenditure of a period, which is to be allocated to
ordinary operations, has to be shown separately in the profit and loss statement.
This includes current taxes which are dependent on results (tax on income), foreign taxes
which are equivalent to domestic income taxes, and tax benefits from the consideration of
countable losses carried forward.
Payments of arrears and reimbursements of the respective taxes for previous years have to be
shown here; they have to be identified in the Notes as components from other periods.
The key types of taxes have to be identified and explained separately. Tax expenditure for
other periods or set-off reimbursements have to be identified.
Foreign taxes leading to a taxation of income as well as of capital have to be divided in corre-
spondence with these two components.
Interest on tax back payments (e.g. due to a tax audit) are not to allaocate to the tax result but
to the interest result.
Data entry:
The recording of deferred tax assets/liabilities which were set off against each other with ef-
fect on results has to be performed here. Deferred taxes may, as a matter of principle, not be
balanced, unless the facts under IAS 12.74 are fulfilled cumulatively.
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The item “deferred taxes” has to be explained and presented to a sufficient extent in the
Notes.
Data entry:
2.16 Transferred profits from profit and loss transfer agreements (EAV) (37200000)
Here, the profits transferred to the parent company under (partial) profit transfer agreements
have to be recorded under the affiliated company. Transferred profits from profit pools have
to be recorded here as well.
Data entry:
The net income is composed of the items result after taxes, extraordinary result and the inter-
est of minority shareholder (in conformity with IAS 8.10).
The result for the period shows the success achieved during the financial year, prior to the ap-
propriation of yields.
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The transitory calculation from net income to net profit/net loss has to be presented in the
breakdown of equity.
This is the share of the minority shareholders in the annual result (annual surplus/annual defi-
cit). It reduces the Group result (IAS 1.75 and IAS 27.26).
This item is to be shown in the consolidated annual account only.
The extraordinary result as per IAS 1.36 (c) in connection with IAS 28.28 has to be incorpo-
rated into the result of the minorities as well.
Data entry:
2.19 Annex
The total amount of accounts payable for goods and services out of investments is to name
here. This is needed for the cash flow statement, to show the occurred cash flows in the re-
porting period. The cash flow statement is crated only for the consolidated financial state-
ment.
Contingent Assets
Is the inflow of economic benefit probable, but not included in the financial statements to the
balance sheet date, the amount is to specify as contingent asset (IAS 37.89).
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Contingent Liabilities
If the possibility of an outflow at fulfillment is not improbable und not show so far in the fi-
nancial statements, the amount is to state as contingent liability (IAS 37.86).
Personnel Expenditures
Here wages and salaries, social spending and expenses for retirement pension and other sup-
port of the entire year are shown.
The number of permanent employees is to divide into the distinct age ranges. The number of
permanent employees for the annual financial statements is determined as the average of the
four quarters of the reporting year.
Here is shown the earnings (profit or loss) from selling of equity holdings.
Incomes and expenditures resulting from exchange differences are given here (IAS 21.9,
21.11a and 21.15).
Deferred Taxes
For all temporary differences between the IFRS balance and the national tax balance deferred
tax assets and deffered tax liabilities are to be formed. The incomes and expenditures result-
ing from this temporal difference, as well as the incomes and expenditures from allowance for
losses are to proven under this position.
The management has to give an estimated planning of the time and amount, when the fiscal
allowances for losses are used up or usable.
Should be deviated in exceptional cases from the principle of the balancing prohibition (IAS
12.74), is the balancing including the corresponding asset and debt positions to be proven
here.
The determination of the deferred taxes is to be done with a planned tax rate. The deviation of
the actual to this planned tax rate is to show here in per cent. Same applies to the absolute tax
expenditure, which results from the tax rate deviation.
The expenditures for the formation of adjustments of value on accounts receivable are to di-
vide into trade accounts receivable, accounts receivable from finance lease and accounts re-
ceivable from financing activity and other net assets.
The incomes from the reversal of adjustments of value on accounts receivable are to divide
into trade accounts receivable, accounts receivable from finance lease and accounts receivable
from financing activity and other net assets.
- Depreciation on goodwill
The goodwill has to undergo an Impairment test annually. If the book value is higher than the
proceedsable amount (net sale proceeds or usage value), the goodwill must be depreciated
success-effectively on its proceedsable amount. This depreciation expenditure is to be speci-
fied under the depreciation of the goodwill.
Expenditures, which result from exchange differences, are proven here (s. IAS 21.9, 21.11a
and 21.15).
- Amount of with enterprises acquired stock of other net assets and liabilities
Acquired stock of other net assets and liabilities, which flowed in by the acquisition of an en-
terprise, are to be presented in the following structure:
• Fixed assets
• Current assets inclusive deferred balances exclusive liquid founds
• Reserves
• Liabilities inclusive deferred balances
- Amount of with enterprises sold stock of other net assets and liabilities
Sold stock of other net assets and liabilities, which flowed out by the sale of an enterprise, are
to be presented in the following structure:
• Fixed assets
• Current assets inclusive deferred balances exclusive liquid founds
• Reserves
• Liabilities inclusive deferred balances
The received interests, which are obtained with affiliated companies and joint ventures, are to
be proven under this position.
Interest expenditures
The paid interests, which are obtained with affiliated companies and joint ventures, are to be
proven under this position. In addition the interest expenditures from finance lease contracts
are to be proven separately.
The accounts receivable from financing activity and other assets are to divide into rights to tax
refunds against the fiscal authorities, claims from derivatives financial instruments and inter-
est claims against third-party.
Under this position are to be given only the irregular depreciations of the financial assets. Ir-
regular depreciations of other positions of the fixed assets are shown in the profit center ap-
pendix.
Extraordinary positions
Extraordinary income
Extraordinary incomes are to be presented in conformance with the structure given in the ap-
pendix. Closer information about when an income is extraordinary is taken from the section
2.17.1 and 2.17.1.1.
Extraordinary expenditure
Extraordinary expenditures are to be presented in conformance with the structure given in the
appendix. Closer information about when expenditure is extraordinary is taken from the sec-
tion 2.17.1 and 2.17.1.1.
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The total number of employees average for all companies which are included in the consoli-
dated financial statement is to be indicated. For this purpose you have to calculate the em-
ployees average of all four quarters as at September 30th, December 31st, March 31st and
June 30th.
Managing directors of affiliated companies are counted among employees for group
statement purposes. In the individual financial statement (local GAAP) managing directors
are not employees, but in the IFRS group statement they are like heads of permanent estab-
lishments of the group top management. Exception: Managing directors which are on the
payroll of another affiliated company and draw their salary from it - no double count
e.g. an employee of KWS SAAT AG is additionally a managing director of an external
affiliated company and doesn't count as an employee of the external company. Consequently
only the executive board doesn't count as employees.
- Tax portion for temporary differences, but no deferred taxes were setted-up (5113753)
For temporary differences, deferred taxes have to be set-up basically. Should this be omit for
a fact, the tax portion for that temporary difference is to be entered.
Financial credits
Here are the amounts captured for borrowing and the repayment of financial credits with
third-parties (banks, insurance).
According to IAS 19.24 you have to differentiate between defined contribution plans and de-
fined benefit plans. Due to these fact the following notes have to be done in the year-end an-
nex on company level:
For the value added statement the following costs are required and have to be splitted into
cost of sales, selling costs, administration costs and other operating expenses.
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2.19.2 Annex for all profit centers to the financial statements (ZANHGES002 – Notes
Yearend II)
Segmental reporting
For the segment reporting and the cash flow statement are the investments in individual posi-
tions of the fixed assets to show in conformance with the structure in the appendix. Invest-
ments are captured in the DET under the transaction type 110 (additions of acquisition costs).
For the segment reporting and the cash flow statement are the depreciations to show in con-
formance with the same structure as the investments on the individual positions of the fixed
assets. Depreciations are captured in the DET under the transaction type 160 (additions of de-
preciation).
Claims from finance lease and claims from financing activity and other assets, which are al-
ready overdue, are to be captured here separated.
Profits and losses from the sale of equity holdings are to be captured under this position.
Under this position are to be given the irregular depreciations of the intangible assets, the
goodwill and tangible assets. Irregular depreciations of the financial asset are shown in the
appendix of the entire corporation (s. section 2.18.1).
The number of employees for the annual financial statements is determined as the average of
the four quarters of the reporting year (see also 2.18.1 annex on company level). Furthermore
it is to divide into permanent employees, fixed term employees and apprentices/trainees.
Personnel expenditures
The personnel expenditures of the reporting year are also to divide into permanent employees,
fixed term employees and apprentices/trainees.
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Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
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- In the Income statement charged appreciations from adjustments of value for each
segment
Here the reversals of valuation adjustments on inventory and accounts receivable already
value-adjusted are captured as reduction of the expenditures for material and supplies in the
income statement for each segment.
- In the income statement charged expenditure from adjustments of value for each
segment
Expenditures for adjustments of value on inventory and accounts receivable, which were
charged success-effectively in the income statement, are recorded under this position for each
segment.
- Direct in equity capital charged appreciation from adjustments of value for each
segment
Here are shown the reversals of valuation adjustments on inventory and accounts receivable
already value-adjusted as increase in equity capital for each segment.
- Direct in equity capital charged expenditure from adjustments of value for each seg-
ment
Expenditures for adjustments of value on inventory and accounts receivable, which were
charged success-neutrally as reduction of equity capital, are recorded under this position for
each segment.
Divisional annex information Corn (corn, oilseed crops, other crops as far as assigned to
the division corn)
Why necessary?
The annex information corn are needed for the following versions and periods
(Layout „ZINFMA01“)
52232200 Wholesa-
le/extraordinary sales
52232210 Total sales all varieties X X 0 Value of the a.m. volume
52232300 Production for other
companies
52232310 Total sales all varieties X X 0 Value of the a.m. volume
52233000 Gross margin-after
Royalties (1.000 na-
tional currency)
52233100 Regular/normal sales
The standard IFRS 1 must be bindingly applied for initial compilation of an IFRS-financial
statement.
The first annual financial statement based on IFRS in this sense is the first publicised annual
financial statement,
Alterations arising in the IFRS opening balance sheet, in comparison to the financial state-
ment based on the local accounting regulations, must be recorded in the profit reserves or in a
different suitable equity capital item.
The historic acquisition or manufacturing costs must be taken as a basis for conversion of the
fixed capital assets.
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Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 195 of 221
For calculation of the net value, the depreciation (preferentially linear) must be exclusively
calculated in accordance with the predetermined IFRS useful life. Special tax depreciation
may not be considered.
opening balance sheet. Solely the currency conversion rate differences originated in after the
IFRS opening balance sheet must therefore be considered in the event of deconsolidation of
affected subsidiaries.
The balance sheet entry must by previously agreed with the group management in the
event of existence of hybrid financial instruments.
3.2.8 Estimations
Estimations at the time of the IFRS opening balance sheet should be made in accordance with
the estimations available at the time of estimation on the local financial statement, unless
these later turned out to be a gross error.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter III
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 197 of 221
Example:
A company compiles its opening balance sheet on the 01.01.2004. On the 30.07.2004 a piece
of information, which ought to lead to reestimation of an issue shown in the local financial
statement on the 31.12.2003, becomes known. According to IFRS 1, this new perception does
not lead to alteration of the estimation in the IFRS opening balance sheet, but must be consid-
ered in the subsequent financial statement on 31.12.2004, thus affecting the profit and loss
statement.
IFRS 1 must be applied to the opening balance per July 1st 2003.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter IV
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 198 of 221
The basis for quarterly reporting has to be IAS 34 (Interim Financial Reporting). The mini-
mum components of an interim financial report in accordance with IAS 34.8 are the follow-
ing:
- condensed balance sheet
- condensed income statement
- condensed equity movement schedule
- condensed cash flow statement
- selected explanatory notes.
The cash flow statement required by IAS 34 will only be prepared by the group accounting.
The preparation of the annex is also necessary for quarterly closing. All events and transac-
tions which are material for the current quarterly report have to be shown. Therefor the IAS
defines in IAS 34.16 the minimum components (if relevant). Furthermore you have to deliver
additional division notes.
All relevant IAS standards have to be considered like in an annual financial report. You have
to take care about the following aspects:
- Ensure that the bookkeeping is up to date. Invoicing has to be effected promptly
after delivery.
- All depreciation has to be booked for the period.
- Evaluation of stocks
o Stocktaking is not necessary for interim financial reporting.
o An adequate and orderly inventory accounting has to be ensured.
- Bad debts devaluation has to be checked.
- Foreign currencies have to be balanced with the exchange rate of the quarter.
- Provisions
o Check all provisions which you have booked for the last year-end closing.
o Provisions have to be endowed every quarter with 25 percent of the total
amount, if this procedure does not lead to apparent errors (e.g. vacation
provisions).
o For set-up of provisions use process instruction as mentioned below.
- Sales, cost of sales and personnel costs have to be accrued.
- In deciding if a deferral has to be booked, materiality should be assessed in rela-
tion to the interim period financial data. Material for the group is 5% of the total
amount of each balance sheet or profit and loss item.
- If necessary provide all documents which are needed by your outsource partner.
The outsource partner are requested to support the country manager in preparation
of needed information.
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter IV
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 199 of 221
4.1 Process instruction for set-up of provisions for interim financial reporting
- You have to calculate the total annual expenses for each item.
- The total amount has to be splitted up in equal shares for all four quarters.
o 25% of total expenses every quarter
o Debit entry: expense
o Credit entry: provision
- The incoming invoices have to be booked as usage towards the accrued provision
of the previous year.
o Debit entry: provision
o Credit entry: creditor
- At the business year-end potential reversals or increased consumptions have to be
booked.
o Debit entry: provision
o Credit entry: income from reversals of provisions
or:
o Debit entry: expense
o Credit entry: provision (increased consumption)
Example:
I -25 -105
II -25 -130
III -25
invoice 65 -90
IV -25
invoice 10
reversal of provision (previous year) 5 -100
KWS GROUP IFRS ACCOUNTING GUIDELINES Chapter IV
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 200 of 221
The total amount of accounts payable for goods and services out of investments is to name
here. This is needed for the cash flow statement, to show the occurred cash flows in the re-
porting period. The cash flow statement is crated only for the consolidated financial state-
ment.
Contingent Assets
Is the inflow of economic benefit probable, but not included in the financial statements to the
balance sheet date, the amount is to specify as contingent asset (IAS 37.89).
Contingent Liabilities
If the possibility of an outflow at fulfillment is not improbable und not show so far in the fi-
nancial statements, the amount is to state as contingent liability (IAS 37.86).
- Amount of with enterprises acquired stock of other net assets and liabilities
Acquired stock of other net assets and liabilities, which flowed in by the acquisition of an en-
terprise, are to be presented in the following structure:
• Fixed assets
• Current assets inclusive deferred balances exclusive liquid founds
• Reserves
• Liabilities inclusive deferred balances
- Amount of with enterprises sold stock of other net assets and liabilities
Sold stock of other net assets and liabilities, which flowed out by the sale of an enterprise, are
to be presented in the following structure:
• Fixed assets
• Current assets inclusive deferred balances exclusive liquid founds
• Reserves
• Liabilities inclusive deferred balances
Other positions
Furthermore are to specify obligations to purchase of tangible assets, in the financial state-
ment not included bad debts and the employee number at the report time (number of employ-
ees at the end of the quarter - 30.09., 31.12., 31.03.).
Financial credits
Here are the amounts captured for borrowing and the repayment of financial credits with
third-parties (banks, insurance).
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Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 204 of 221
In the quarterly reporting, taxes on income have to be calculated and shown according to the
quarterly result before taxes (result of ordinary activities) as well as in the year-end closing.
This applies for positive as well as for negative results before taxes. Tax expenses arise from a
positive result before taxes. These tax expenses have to correspond to the local tax income
rate and have to be shown in the DET plus possible tax expenses related to other periods and
minus possible tax income related to other periods.
Tax income arises when there is a negative result before taxes within the quarter as well as a
positive result before taxes in that fiscal year or a positive result in the following years
(budget/forecast), because for quarterly purposes a tax refund claim is lodged with the tax au-
thority. The tax income which has to be shown in the DET corresponds to the local tax in-
come rate minus possible tax expenses related to other periods and plus possible tax income
related to other periods.
Exception: You have to set the capitalization aside when a loss is estimated for the whole fis-
cal year and the loss can’t be charged with taxable profits of other fiscal years according to
the country-specific tax law (loss carryback or loss carryforward).
Each company must draw up a cash flow statement according to IAS 7 and present it as an in-
tegral part of the financial statement for every accounting period.
The cash flow statement must contain the cash flow during the reporting period, which is
classified according to business activity, investment and financing activity.
KWS GROUP IFRS-ACCOUNTING GUIDELINES Chapter VI
Date: Oct. 9, 2009 KWS AG FINANCIAL MANAGEMENT
Status: Sept. 30, 2009 Page 206 of 221
6 FORMS
6.1.3 Annex