Reebok 2013 Annual Report Download - page 207

adidas Group
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2013 Annual Report
Consolidated Financial Statements
203
2013
Notes
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04.8
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Recognition of revenues
Sales are recognised at the fair value of the consideration received or receivable, net of returns, trade discounts
and volume rebates, when the significant risks and rewards of ownership of the goods are transferred to the
buyer, and when it is probable that the economic benefits associated with the transaction will flow to the Group.
Royalty and commission income is recognised based on the contract terms on an accrual basis.
Advertising and promotional expenditures
Production costs for media campaigns are included in prepaid expenses (other current and non-current assets)
until the services are received, and upon receipt expensed in full. Significant media buying costs are expensed
over the intended duration of the broadcast.
Promotional expenses that involve payments, including one-time up-front payments for promotional
contracts, are expensed on a straight-line basis over the term of the agreement.
Interest
Interest is recognised as income or expense as incurred using the “effective interest method” with the exception
of interest that is directly attributable to the acquisition, construction or production of a qualifying asset. This
interest is capitalised as part of the cost of the qualifying asset.
Income taxes
Current income taxes are computed in accordance with the applicable taxation rules established in the countries
in which the Group operates.
The Group computes deferred taxes for all temporary differences between the carrying amount and the tax
base of its assets and liabilities and tax loss carry-forwards. As it is not permitted to recognise a deferred tax
liability for goodwill, the Group does not compute any deferred taxes thereon.
Deferred tax assets arising from deductible temporary differences and tax loss carry-forwards which exceed
taxable temporary differences are only recognised to the extent that it is probable that the company concerned will
generate sufficient taxable income to realise the associated benefit.
Income tax is recognised in the income statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Estimation uncertainties and judgements
The preparation of financial statements in conformity with IFRS requires the use of assumptions and estimates
that affect reported amounts and related disclosures. Although such estimates are based on Management’s best
knowledge of current events and actions, actual results may ultimately differ from these estimates.
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance
sheet date which have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are outlined in the respective Notes, in particular goodwill
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SEE NOTE 12,
trademarks
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SEE NOTE 13, other provisions
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SEE NOTE 19, pensions
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SEE NOTE 23, derivatives
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SEE NOTE 28 as well
as deferred taxes
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SEE NOTE 33.
Judgements have, for instance, been used in classifying leasing arrangements as well as in determining
valuation methods for intangible assets.