Porsche 2009 Annual Report Download - page 160

160 Financials
Cash and cash equivalents
The cash and cash equivalents include checks, cash on hand and at banks. This item also
includes cash and cash equivalents that are not freely available for use by the Porsche SE group.
Deferred taxes
Deferred tax assets are generally recognized for deductible temporary differences between
the tax base and carrying amounts in the consolidated balance sheet (taking into account tempo-
rary differences arising from consolidation) as well as on unused tax losses and tax credits if it is
probable that they will be used. Deferred tax liabilities are generally recognized for all taxable tem-
porary differences between the tax base and the carrying amounts in the consolidated balance
sheet (temporary concept). Deferred tax liabilities for taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures are not recognized if the
timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Valuation allowances are recognized on deferred tax assets that are unlikely to be realized
in a manageable 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 it to be recov-
ered.
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. De-
ferred taxes are not discounted.
Deferred taxes referring to items recognized directly in equity are presented in equity. De-
ferred 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 claim for pay-
ment of corporate income taxes is recognized at net present value 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 reporting date. Adequate provisions were
recognized for future probable tax liabilities, considering a large number of factors such as interpre-
tations, commentaries and jurisdiction on the pertinent tax legislation as well as past experience.
Current tax relating to items recognized directly in equity is recognized directly in equity
and not in the income statement.