Porsche 2009 Annual Report Download - page 164

164 Financials
Interest income and expenses are determined using the effective interest method for finan-
cial instruments measured at amortized cost and interest-bearing securities held for sale.
Dividend income is recognized when the group’s right to receive the payment is established.
Production-related expenses are recognized upon delivery or utilization of the service, while
all other expenses are recognized as an expense as incurred. The same applies for development
costs not eligible for recognition.
Provisions for warranty claims are recognized upon sale of the related products. Interest
expenses incurred for financial services are presented as cost of materials.
Contingent liabilities
A contingent liability is a possible obligation to third parties that arises from past events
and whose existence will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Porsche SE group. A contingent liability
may also be a present obligation that arises from past events but is not recognized because an
outflow of resources is not probable or the amount of the obligation cannot be measured with suffi-
cient reliability. The amount of contingent liabilities is only stated in cases where the probability of
an outflow of resources is not classified as remote by management.
Put options of non-controlling interests
Where non-controlling interests have put options, the portion of total comprehensive income
of the period that is attributable to non-controlling interests as well as dividend payments to and
withdrawals by non-controlling interests are presented as a change in equity. As of the reporting
date, a liability needed to settle the option is recognized and the difference between this liability and
the pro rata equity of the non-controlling interest is recognized directly in equity. Deferred taxes are
recognized for temporary differences between the IFRS balance sheet carrying amount and the tax
base at partnerships.
Significant accounting judgments and estimates
The preparation of consolidated financial statements requires certain judgments and esti-
mates that have an effect on recognition, measurement, presentation and disclosure of assets,
liabilities, income and expenses as well as contingent assets and contingent liabilities. These judg-
ments and estimates reflect the current information available. Key sources of estimations are the
parameters influencing the profit or loss from investments accounted for at equity such as the fair
value from purchase price allocations, useful lives and amortization or depreciation methods at the
level of the investee, the measurement of impairment losses and reversals of impairment losses
recognized on the carrying amounts of associates and joint ventures, the measurement of deriva-
tive financial instruments, the recoverability of receivables and the measurement of provisions and
contingent liabilities. In individual cases, amounts realized may differ from the estimates. The carry-