Valuation principles

Financial statements of the individual Group companies are consolidated into the Group’s financial statements and measured in accordance with uniform accounting principles applied consistently throughout the Group. The key valuation methods used for the major balance sheet items are as follows:

Cash and cash equivalents

This category comprises cash on hand, current account balances with banks and other financial institutions, as well as fixed‑term deposits with a remaining maturity of no more than 90 days from the balance sheet date. Cash and cash equivalents are measured at their nominal value.

Receivables from goods and services

Receivables from goods and services are measured at their nominal value. Identifiable individual risks are accounted for through specific value adjustments. Remaining credit risks are covered by applying country‑specific value adjustments of between 2% and 10%, based on historical experience.

Inventories

Inventories are measured at acquisition or manufacturing cost. If the fair value less cost to sell is lower, this lower value is applied. Manufacturing costs include the cost of raw materials, direct production costs, and an appropriate share of general overheads. All identifiable risks of loss, including those relating to items with low inventory turnover, are reflected through value adjustments. Inventories from intercompany deliveries are stated without any unrealised intercompany profits. Discounts are recongnised as reduction of the acquisition price of inventory.

Tangible fixed assets

Tangible fixed assets are measured at acquisition or historical cost, less accumulated depreciation. Depreciation is calculated on a straight‑line basis over the expected useful life of the asset, taking residual values into account. The applicable depreciation periods are as follows:

Assets of insignificant value (< CHF 2,000) are expensed directly in the income statement upon acquisition. Any unrealised gains arising from intra‑Group transfers of assets are eliminated as part of the consolidation process.

Leasing

Leased assets classified as finance leases are recognised as assets in the balance sheet. At the commencement of the lease term, the leased asset is measured at the lower of its purchase or market value, or at the present value of the minimum lease payments. The corresponding obligation to the lessor is recorded as a lease liability. Costs arising from rental agreements and operating leases are expensed in the income statement as incurred.

Financial assets

Non‑consolidated participations are recognised in the balance sheet at either their proportionate equity value (equity method) or at acquisition cost. Loans and marketable securities are carried at their nominal value or acquisition cost, respectively, less any necessary value adjustments.

Intangible assets

Intangible assets include software and other identifiable intangible rights. Acquired intangible assets are recognised in the balance sheet at acquisition cost and are amortised on a straight‑line basis over their estimated useful lives. If the useful life cannot be determined reliably, the intangible asset is amortised over a useful life of five years.

Assets of insignificant value are expensed directly in the income statement at the time of acquisition.

Impairment of assets

If there is any indication that an asset may be impaired, an impairment test is performed. Where the test indicates a loss in value, the carrying amount is written down to the recoverable amount. The recoverable amount corresponds to the higher of:

• value in use, representing the present value of estimated future cash flows expected to arise from the continued use of the asset, and
• fair value less costs to sell, representing the amount obtainable from selling the asset in an orderly transaction between market participants, after deducting disposal costs.

Payables for goods and services

Current liabilities comprise obligations that fall due for repayment within twelve months. Long‑term financial liabilities refer to financing arrangements with maturities exceeding one year. All liabilities, including financial debts, are recognised in the balance sheet at their nominal values.

Provisions

Provisions are recognised when a legal or constructive obligation arising from past events exists, the outflow of resources to settle the obligation is probable, and the amount can be estimated reliably. The measurement of provisions reflects the best estimate of the expenditure required, taking into account the economic risks associated with the underlying obligation. If the impact of discounting is material, provisions are measured at their present value as at the balance sheet date.

Taxes

All tax obligations, irrespective of their due dates, are recognised. Current income taxes are calculated on the basis of taxable income and presented in the balance sheet under ‘Accrued expenses and deferred income’. Deferred taxes are recognised for all temporary differences between the values reported for tax purposes and the corresponding carrying amounts in the financial statements.

Deferred tax assets on tax loss carryforwards are recognised only to the extent that their utilisation against future taxable profits is considered probable.

For profits of Group or associated companies that have not yet been distributed but for which distribution is planned, non‑refundable withholding taxes and income taxes incurred at the parent company level are recognised as deferred tax liabilities when the profits arise and are released upon distribution.

Country‑specific tax rates are applied when calculating deferred taxes. Deferred tax assets are reported as financial assets, while deferred tax liabilities are presented as long‑term provisions.

Derivative financial instruments

The Group uses derivative financial instruments to hedge foreign currency risks. As permitted under Swiss GAAP FER, these hedging instruments are measured in line with the valuation principles of the underlying transaction. Accordingly, they are not recognised at fair value during the hedge period; related gains and losses are recorded in profit or loss upon settlement of the hedged transaction.