Siemens 2005 Annual Report Download - page 175

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The Consolidated Balance Sheets include the following significant components related to
pension plans and similar commitments based upon the situation at:
Consolidated Statements of Income
The recognized expense related to pension plans and similar commitments in the Consolidated
Statements of Income is referred to as net periodic pension cost (NPPC) and consists of several
separately calculated and presented components. NPPC is comprised of the service cost, which is
the actuarial net present value of the part of the PBO for the service rendered in the respective fis-
cal year; the interest cost for the expense derived from the addition of accrued interest on the
PBO at the end of the preceding fiscal year on the basis of the identified discount rate; and the
expected return on plan assets in the case of funded benefit plans. Actuarial gains and losses,
resulting for example from an adjustment of the discount rate, and asset gains and losses, result-
ing from a deviation of actual and expected return on plan assets, are not recognized in the Con-
solidated Statements of Income as they occur. If these unrecognized gains and losses exceed 10%
of the higher of PBO or market related value of plan assets, they are amortized over the remaining
service period of the active employees as a separate component of NPPC.
In the Consolidated Statements of Income, NPPC is allocated among functional costs (cost of
sales, research and development, marketing, selling and general administrative expense),
according to the function of the employee groups accruing benefits.
In the Consolidated Statements of Income, NPPC expenses before income taxes for the Com-
pany’s principal pension and other postretirement benefits in fiscal 2005 aggregated to €1,009
compared to €1,135 in the previous fiscal year.
Notes to Consolidated Financial Statements
Consolidated Financial Statements Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
September 30,
2005 2004
Accumulated other comprehensive income (10,879) (8,943)
thereof principal pension benefit plans (10,573) (8,760)
Less income tax effect 4,109 3,418
thereof principal pension benefit plans 3,824 3,353
Accumulated other comprehensive income, net of income taxes (6,770) (5,525)
thereof principal pension benefit plans (6,749) (5,407)
Accruals for pension plans and similar commitments 4,917 4,392
thereof principal pension benefit plans 2,749 2,391
thereof principal other postretirement benefit plans 1,317 1,317
thereof other 851 684