Siemens 2005 Annual Report Download - page 225

Consolidated Financial Statements Notes to Consolidated Financial Statements Glossary
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GASC Short for “German Accounting Standards Committee.” An independent registered association to
develop, among other things, accounting standards for application in the area of consolidated
financial reporting.
German GAAP Short for “Generally Accepted Accounting Principles in Germany.” The accounting concepts,
measurements, techniques and standards of presentation used in financial statements in Ger-
many pursuant to the German Commercial Code (HGB).
Goodwill The excess of cost of an acquired entity over the amounts assigned to assets acquired and liabili-
ties assumed.
Group profit Measure of Group profitability, defined as earnings before financing interest, certain pension
costs and income taxes.
Hedging A strategy used to minimize exposure to changes in prices, interest rates or exchange rates by
means of derivative financial instruments (options, swaps, forward contracts, etc.).
Joint venture A form of business partnership between two or more companies to engage in a commercial
enterprise with mutual sharing of profits and losses.
Medium-term note Flexible financing framework providing for the issuance of notes in rotation in the context of a
programprogram unrestricted in time (constant issue). The notes may be issued in several tranches, with
terms and conditions and time of issue being determined in accordance with then current goals
and prevailing market conditions.
Moody’s Investors Service Independent rating agency that assesses securities investment and credit risk.
Net capital employed Net capital employed is the asset measure used to assess the capital intensity of Operations.
Its definition corresponds with the Group profit measure.
Net cash from operating Total of cash provided by (used in) operating and investing activities as determined in the
and investing activities Statements of Cash Flow.
Net periodic pension cost The amount of pension costs recorded in the Statements of Income. Net periodic pension cost
components include service cost, interest cost, expected return on plan assets, amortization of
unrecognized prior service cost (if any), gains or losses recognized and amortized after exceed-
ing a certain corridor (if any), amortization of unrecognized initial net obligation and/or initial
net asset.
Operations One of Siemens’ three components. Composed of the twelve operating Groups, including cer-
tain operating activities not associated with these Groups and centrally managed items but
excluding Financing and Real Estate and Corporate Treasury.
Projected benefit A measure to determine pension liabilities. The PBO is the actuarial present value as of a specific
obligation (PBO) date of employees’ vested and non-vested pension benefits incorporating compensation
increases, attributable to employee services performed as of that date.
R&D Abbreviation for “research and development.”
Rating Standardized evaluation of issuers’ credit standing and debt instruments, carried out by special-
ized agencies (such as Standard & Poor’s or Moody’s Investors Service).
Risk management Systematic process to identify, assess and monitor various financial risk factors and to select and
implement measures to handle those risk factors.
SECShort for “Securities and Exchange Commission.” The primary federal agency in the U.S. respon-
sible for regulating the financial reporting practices of most publicly owned corporations in con-
nection with the buying and selling of stocks and bonds.
Standard & Poor’s Independent rating agency that provides evaluation of securities investment and credit risk.
Stock options Form of employee incentive and compensation. The employee is given an option to purchase a
company’s shares if certain targets are met under specified conditions.
U.S. GAAP Short for “United States Generally Accepted Accounting Principles.” The accounting concepts,
measurements, techniques and standards of presentation applicable to financial statements in
the U.S.
Volatility The degree of fluctuation for a given price or rate, such as a stock price or currency exchange
rate.