Siemens 2010 Annual Report Download - page 333

261 Additional information 147 Consolidated Financial Statements
262 Statement of the Managing Board
262 Responsibility statement
263 Independent auditors’ report
264 Five-year summary
266 Glossary
269 Index
273 Information resources
275 Company structure
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E
Equity method The equity method is a method under which associates are accounted for in the Consolidated Financial Statements.
Under the equity method, the investment in an associate is initially recognized at cost and the carrying amount is
subsequently increased or decreased for changes of the investor’s share of net assets of the investee, which includes
the investor’s share of the profit or loss of the investee after the date of acquisition.
Expected return on plan assets An estimation of expected return derived from pension plan assets at the beginning of fiscal year.
F
Free cash flow A measure of operative cash generation. Siemens defines Free cash flow as inflows and outflows of cash and
cash equivalents provided by (used in) operating activities less cash outflows for additions to intangible assets and
property, plant and equipment.
Functional costs Functional costs comprise Cost of goods sold and services rendered, Research and development expenses, Market-
ing, selling and general administrative expenses.
Funded status of pension plan The difference between a pension plan’s defined benefit obligation (DBO) and the fair market value of assets desig-
nated to the pension plan (plan assets) as of a specific date.
G
German Corporate Governance Code The German Corporate Governance Code presents essential statutory regulations for the management and super-
vision of German listed companies. It contains internationally and nationally recognized standards for good and
responsible governance.
Gezeichnetes Kapital A part of equity, representing the amount to which the shareholders’ liability is limited. It is also referred to as share
capital (Grundkapital) in a German stock corporation.
Goodwill Excess of acquirer’s interest in the net fair value of acquiree’s net assets over the cost of acquisition.
H
Hedge Accounting Hedge Accounting is a certain accounting method related to hedging of cash flows or fair values of assets and
liabilities with a hedging instrument such as derivatives.
HGB Abbreviation for German Commercial Code (HGB). Forms the basis of the accounting concepts, measurement
techniques and standards of presentation used in financial statements in Germany.
Hybrid bond A hybrid bond is a corporate bond that, due to its characteristics such as long maturity date and subordination,
bears the character of both debt and equity.
I
IFRS Abbreviation for International Financial Reporting Standards (IFRS), previously International Accounting Standards
(IAS). According to the IAS regulation endorsed by the European Union, publicly traded companies in the European
Union are required to prepare their consolidated financial statements in accordance with IFRS.
J
Joint venture A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control.
L
Leasing A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments
the right to use an asset for an agreed period of time.
M
Medium Term Notes Program A Medium Term Notes Program is a kind of framework between companies and traders of notes (often banks).
Under such a program, a company has the possibility of issuing securities to the capital market. This provides flexi-
bility in raising debts within a very short period of time. Terms and conditions of each note, especially regarding
maturity, interest and currency, are determined at the date of issuance and are in accordance with emission target
and prevailing market conditions.
Moody’s Investors Service Independent rating agency that provides standardized indicators for assessing a companies’ credit ratings.