Catom Annual Report 2020 EN

Deferred taxes are stated at present value using a discount rate that is based on the net interest rate. The net interest rate is defined as the rate applying to the legal entity for long-term loans after deduction of tax based on the effective tax rate. 2.11.4. Provision for long-service awards A provision is recognised for long-service awards, equal to the present value of the expected payments in connection with such awards during employment, applying a discount rate of 4%. The amount of the provision takes into account the likelihood that the employees involved will remain with the company. 2.11.6. Other provisions Other provisions are stated at the nominal amount of the expenditures expected to be required to settle the liabilities for which these provisions have been recognised. 2.12. Liabilities Upon initial recognition, liabilities are stated at fair value. Transaction costs directly attributable to the acquisition of liabilities are included in the initial recognition. Liabilities are subsequently stated at amortised cost, which is the amount received, taking into account any premium or discount, less transaction costs. 2.11.5. Provision for clean-up operations This provision relates to environmental obligations and risks. It is stated at nominal value.

2.13. Leasing

2.13.1. Operating leases The company may have lease contracts where many of the risks and rewards associated with ownership of the underlying assets have not been transferred to the company. These lease contracts are accounted for as operating leases. Liabilities under operating lease contracts are recognised in the profit and loss account over the term of the contract on a straight-line basis, taking into account any fees received from the lessor.

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