BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund Inventories Deferred taxes Inventories are measured at cost less any Deferred tax assets and liabilities resulting from discounts, subject to the strict lower of cost or differences in the carrying amounts in the financial market principle. accounts and in the tax accounts are netted against each other if certain conditions are met. Irrespective Receivables and other assets of their date of realisation, deferred tax assets were Receivables and other assets are measured at their recognised on loss carryforwards in the amount of nominal amounts. A general valuation allowance is the excess deferred tax liabilities. As in the previous made for the overall credit and interest-rate risk year, deferred taxes are measured using the while separate allowances are recognised for average tax rate of 32.81%. identifiable individual risks. Because transfer receivables must be measured in full on an Deferred income item-by-item basis, general valuation allowances Deferred income is income that was received prior are not recognised for them. to the reporting date but that is not earned until after the reporting date. The amounts are reversed Cash-in-hand and bank balances rateably over the periods to which they relate. Cash-in-hand and bank balances are recognised at their nominal amounts. Foreign currency translation Assets and liabilities denominated in foreign Prepaid expenses currency with a residual term of less than one year Prepaid expenses are future expenses that have are translated at the mean spot rate on the balance been paid prior to the reporting date. These sheet date. primarily relate to prepayments for personnel expenses in connection with contract extensions, and to insurance premiums. The amounts are reversed rateably over the terms/lives of the individual items. Provisions Provisions are recognised for all identifiable uncertain liabilities. They are carried at the settlement amounts deemed necessary as dictated by prudent business judgement. Liabilities Liabilities are recognised at the settlement amount, while foreign-denominated liabilities are accounted for at the hedged exchange rate. 92