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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
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eligible employees, taking into consideration any vesting conditions, irrespective of the market value of the
shares.
B.19 PROVISIONS FOR RISKS AND CHARGES
Provisions for risks and charges are recognised for losses and charges of a definite nature, whose existence
is certain or probable, but the amount and/or timing of which cannot be determined reliably. A provision is
recognised only when there is a current (legal or constructive) obligation for a future outflow of economic
resources as the result of past events and it is likely that this outflow is required to settle the obligation. Such
amount is the best estimate of the expenditure required to settle the obligation. Where the effect of the time
value of money is material and the obligation settlement date can be estimated reliably, the provisions are
stated at the present value of the expected outlay, using a rate that reflects market conditions, the variation
in the cost of money over time, and the specific risk attached to the obligation.
Increases in the provision due to changes in the time value of money are accounted for as interest expense.
Risks for which the emergence of a liability is only possible but not remote are indicated in the disclosures
about commitments and contingencies and no provision is recognised.
Any contingent liabilities accounted for separately when allocating the cost of a business combination, are
valued at the higher of the amount obtained using the method described above for provisions for risks and
charges and the liability's originally determined present value.
Further details can be found in Note 29. Contingent liabilities.
The provisions for risks and charges include the estimated legal costs to be incurred if such costs are
incidental to the extinguishment of the provision to which they refer.
B.20 REVENUE RECOGNITION
Revenue is recognised at the fair value of the consideration received for the sale of goods and services in
the ordinary course of the Group's business. Revenue is recognised net of value-added tax, expected
returns, rebates and discounts.
Revenue is accounted for as follows:
(a) Sales of goods
Revenue from the sale of goods is recognised when the risks and rewards of the goods are transferred to
the customer; this usually occurs when the goods have been dispatched or delivered to the customer and
the customer has accepted them.
(b) Sales of services
The sale of services is recognised in the accounting period in which the services are rendered, with
reference to the progress of the service supplied and in relation to the total services still to be rendered.