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Under IAS 12, “Income Taxes,” deferred tax assets and liabilities are recognized in the con- solidated financial statements for all temporary differences between the carrying amounts of assets and liabilities and their tax bases, for tax credits and operating loss carry-forwards. For purposes of calculating deferred tax assets and liabilities, the Company applies the tax rates that have been enacted or substantively enacted at the reporting date. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period the legislation is substantively adopted. Deferred tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the tax credits and tax loss carry-forwards can be used. Fair Value IFRS 13, “Fair Value Measurement,” applies to IFRS that require or permit fair value mea- surement or disclosure and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement. The fair value is the price that would be received to sell an asset or paid to transfer a liability. The three level fair value hierarchy in accordance with IFRS 13 is applied. Fair value hierarchy level 1 is assigned to financial assets or liabilities for which quoted market prices for identical assets or liabilities in active markets exist. The allocation to fair value hierarchy level 2 is applied when valuation models are used or prices are derived from similar transactions. Financial assets and liabilities are measured at fair value hierarchy level 3 if unobservable input factors are applied to determine fair value. When measuring assets and liabilities the effect of non-performance risk is also reflected in the fair value. Intangible Assets Intangible assets, including software, are accounted for in accordance with IAS 38, and are recognized if (a) the intangible asset is identifiable (i. e., it is separable or arises from contrac- tual or other legal rights), (b) it is probable that the expected future economic benefits (e. g., cash or other benefits such as cost savings) that are attributable to the asset will flow to the entity, and (c) the cost of the intangible asset can be measured reliably. Intangible assets with definite useful lives are measured at cost less accumulated amorti- zation. Borrowing costs that are directly attributable to qualifying assets are capitalized. Intangible assets are amortized straight-line over the shorter of their contractual term or their estimated useful lives. The following useful lives are applied: Years Patents, licenses and similar rights 5 to 25 Other intangible assets 1 to 25 90 Notes to Consolidated Financial Statements


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