Porsche 2008 Annual Report Download - page 167

165
Valuation allowances are recognized on deferred tax assets that are unlikely to be realized in a
clearly predictable period. A previously unrecognized deferred tax asset is reassessed and recog-
nized to the extent that it has become probable that future taxable profit will allow the deferred tax
asset to be recovered. Deferred taxes are measured on the basis of the tax rates that apply or
that are expected to apply based on the current legislation in the individual countries at the time of
realization. Deferred taxes are not discounted. Deferred taxes referring to items recognized
directly in equity are presented in equity. Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity and the same taxation authority.
Current taxes
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The recognized tax
asset arising from the claim for payment of corporate income taxes is discounted using a risk-free
interest rate that matches the timing of the cash flows. The tax rates and tax laws applied for
measurement are those that are enacted or substantively enacted by the balance sheet date.
Adequate provisions was recognized for future probable tax liabilities, considering a large number
of factors such as interpretations, commentaries and jurisdiction on the pertinent tax legislation as
well as past experience.
Current tax relating to items recognized directly in equity is recognized in equity and not in the
income statement.
Discontinued operations and non-current assets held for sale
Discontinued operations are components of an entity that have either been disposed of or are
classified as held for sale and which represent a separate major line of business or geographical
area of operations, are part of a single coordinated plan to dispose of a separate major line of
business or geographical area of operations or are a subsidiary acquired exclusively with a view to
resale. Under IFRS 5, discontinued operations which are disposed of from the consolidated group
are presented separately. The income and expenses arising prior to disposal and the gain on sale
are disclosed separately in the income statement as profit from discontinued operations after the
profit from continuing operations. The comparative information in the income statement is restated
accordingly. Under IFRS 5, non-current assets or groups of assets and liabilities are classified as
held for sale if their carrying amounts will be recovered principally through a sale transaction
rather than through continuing use. Such assets are carried at the lower of their carrying amount
and fair value less costs to sell, and are presented separately in current assets and liabilities in the
balance sheet.