CONSOLIDATED FINANCIAL STATEMENTS for the period from 1 July 2020 to 30 June 2021 entity a) has a legally enforceable right to set off the Deferred tax assets and liabilities are measured on recognised amounts, and b) intends either to settle the basis of the tax laws adopted by the Bundestag on a net basis, or to realise the asset and settle the and ratified by the Bundesrat as at the end of the liability simultaneously. reporting period using a rate of income tax of 32.81% (previous year: 32.81%). Deferred taxes Deferred taxes are recognised for all temporary Inventories differences between the tax base of assets and Inventories consist principally of goods held by the liabilities and their carrying amounts in the IFRS subsidiary company BVB Merchandising GmbH. financial statements (liability method). However, if Inventories are measured at cost less any individual in the course of a transaction which is not a business allowances for goods whose cost may not be combination a deferred tax asset or liability arises recoverable. from the initial recognition of an asset or liability which, at the time of the transaction, affects neither Cash and cash equivalents the accounting nor the taxable profit or loss, the Cash includes cash on hand, cheques and balances deferred tax asset or liability is neither recognised with banks. Cash equivalents are short-term, highly at the date of initial recognition nor afterwards. liquid investments that are readily convertible to a known amount of cash or convertible to a known Deferred tax assets are recognised to the extent that amount of cash within a period of less than three it is probable that taxable profits will be available months and which are subject to an insignificant risk against which the temporary difference can be of changes in value. Cash and cash equivalents are utilised. Deferred tax assets are also recognised for measured initially at fair value and subsequently at tax loss carry-forwards that can be utilised in amortised cost. subsequent periods, provided it is sufficiently probable that the deferred tax asset will be Ordinary shares recoverable. The costs directly attributable to the issue of ordinary shares are deducted from equity (net of taxes, if Deferred taxes relating to items recognised directly applicable). in other comprehensive income are also recognised in other comprehensive income. Treasury shares The full amount paid for the purchase of treasury Deferred tax assets and liabilities are netted against shares is reported as an item deducted from each other where the Group has a legally equity. The Company has the right to reissue enforceable right to set off current tax assets against treasury shares purchased by it at a later date. current tax liabilities, and the deferred tax assets Proceeds of resale in excess of cost are added to and liabilities relate to income taxes levied by the capital reserves, while shortfalls are taken to same taxation authority on the same taxable entity. retained earnings. 189