Porsche 2012 Annual Report Download - page 185

Provisions are not offset against reimbursement claims from third parties. Reimbursement
claims are recognized separately in other assets if it is virtually certain that the Porsche SE
group will receive the reimbursement when it settles the obligation.
Accruals are not presented under provisions, but under trade payables or other liabilities,
depending on their nature.
Liabilities
Non-current liabilities are recognized at amortized cost. Differences between their historical cost
and their repayment amount are accounted for using the effective interest method. Current liabil-
ities are recognized at their repayment or settlement value.
Revenue and expenses
Revenue is generally recognized to the extent that it is probable that the economic benefits will
flow to the group and the revenue can be reliably measured.
Revenue from the sale of products is generally not recognized until the point in time when
the significant opportunities and risks associated with ownership of the goods and products
being sold are transferred to the buyer. Revenue is reported net of discounts, customer bonuses
and rebates.
Income from assets for which a group entity has a buyback obligation cannot be realized
until the assets have definitely left the group. If a fixed repurchase price was agreed when the
contract was concluded, the difference between the selling and repurchase price is recognized
as income ratably over the term of the contract. Prior to that time, the assets are accounted for
as inventories.
Revenue from receivables from financial services is realized using the effective interest
method.
Revenue is generally recorded separately for each business transaction. If two or more
transactions are linked in such a way that the commercial effect cannot be understood without
reference to the series of transactions as a whole, the criteria for revenue recognition are applied
to these transactions as a whole. If, for example, loans in the financial services sector are issued
at below market interest rates to promote sales of new vehicles, revenue is reduced by the in-
centive arising from the loan.
Revenue from long-term development contracts is recognized in accordance with the per-
centage of completion method.
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