The preparation of the half-year financial report in accordance with IFRS requires discretionary decisions and estimates for some items, which might have an effect on their recognition and measurement in the balance sheet and income statement. The actual amounts realised may differ from these estimates. Estimates are required in particular for

• the assessment of the need to recognise and the measurement of impairment losses relating to intangible assets, tangible assets and inventories,
• the recognition and measurement of pension obligations,
• the recognition and measurement of Other provisions,
• the assessment of the recoverability of deferred tax assets,
• the assessment of the stage of completion of long-term construction contracts.

Any change in the key factors which are applied in the impairment review of goodwill may possibly result in higher or lower impairment losses or no impairment losses being recognised.

The obligation arising from defined benefit commitments is determined on the basis of actuarial assumptions. Any change in the assumptions would have no effect on earnings, as actuarial gains and losses are recognised directly in equity.

The recognition and measurement of Other provisions are based on the assessment of the probability of an outflow of resources to settle the obligation, and on past experience and circumstances known at the balance sheet date. The actual amount utilised may therefore differ from the figure set aside in Other provisions in the balance sheet.

Deferred tax assets in respect of unused tax losses are recognised on the basis of an assessment of their future recoverability: i. e. when there is sufficient taxable income or there are lower tax charges. The actual tax situation in future periods, and the extent to which tax loss carryforwards may be used, may differ from the assessment made at the date the deferred tax assets are recognised.

The assessment of the stage of completion of long-term construction contracts is based on the percentage of completion method, subject to certain conditions being met. The stage of completion of the contract is determined on the basis of the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Especially with regard to current major projects, we have further refined our processes for the calculation and analysis of contract cost incurred and especially taken into account contract cost - also facilitating external experts - incurred by subcontractors based on the stage of completion.

Discretionary decisions are required to be made, for example, in assessing whether leases can be defined as finance leases: i.e. leases which transfer substantially all the risks and rewards incidental to the ownership of the asset.