Notes to the Financial Statements Hilti Corporation Notes to the Financial Statements Hilti Corporation (1) General information The following table identifies the significant presentation differences relating to items in the financial statements of Hilti Corporation and the corresponding items in the Group’s consolidated financial statements. Hilti Corporation is a limited by shares company incorporated and domiciled in the Principality of Liechtenstein. Its registered office is at Feldkircherstrasse 100, 9494 Schaan, Liechtenstein. Hilti Corporation is the parent and main operating company of the Hilti Group. The Relevant financial statement item Presentation in financial statements of Presentation in Group financial statements shareholders have an interest in the Group through their interest in Hilti Corporation. The accompanying Group’s consolidated financial Hilti Corporation statements are the most significant indicator of the Group’s financial position and financial performance. Investments in deposits, bonds and equi- Included in ‘financial investments’. Included in ‘financial assets at fair value ties restricted to the funding of losses through profit or loss’ under current assets (2) Accounting policies arising from damages to assets and losses heading. arising from product-related obligations (2.1) Overview Recognized values of derivative financial Included in ‘accrued income and prepay- Presented as a separate line item ‘derivative instruments ments’ or ‘accrued liabilities and deferred financial instruments’ under each of the In contrast to the Group’s consolidated financial statements, which have been prepared in accordance with International Financial income’ as applicable. current and non-current assets and Reporting Standards (IFRS), the financial statements of Hilti Corporation have been prepared in accordance with Liechtenstein’s liabilities headings. corporations law, the ‘Personen- und Gesellschaftsrecht (PGR)’. As a result, there are significant differences between the accounting Short-term tax obligations Included in ‘provisions’. Presented as a separate line item ‘current treatments in the financial statements of Hilti Corporation and the accounting treatments in the Group’s consolidated financial income taxes payable’ under current liabili- statements. The significant measurement, recognition and presentation differences are listed below. Apart from these differences, the ties heading. accounting policies adopted for the measurement, recognition and presentation of financial statement items in both sets of financial statements are substantially the same. (2.3) Changes in accounting policies (2.2) Differences in accounting policies to those of the Group There have been no material changes in accounting policies in the 2020 financial statements of Hilti Corporation from those adopted in 2019. The following table identifies the relevant financial statement items and the corresponding treatments where the accounting policies adopted for the measurement and recognition of items in the financial statements of Hilti Corporation are significantly different from those adopted in the Group’s consolidated financial statements. (3) Exchange rates Relevant financial statement item Treatment in financial statements of Treatment in Group financial statements For details of foreign exchange rates of principal currencies that have been applied for translation into Swiss francs, see note (2.6) of the Hilti Corporation Group’s consolidated financial statements. Valuation of property, plant and equipment In accordance with taxation rules pursuant At lower of market value and historical cost and inventories to Article 1086 of the PGR. subject to adjustment for depreciation or obsolescence based on economic esti- (4) Intangible assets mates. Valuation of investments in associated At historical cost. In accordance with the equity method of in CHF million Rights Other Prepay- TToottaall companies and joint ventures accounting. intangible ments or Valuation of provisions Based on business risk criteria. In accordance with the best estimate of the assets assets amounts required to satisfy existing obliga- under de- tions. velopment Reporting of derivative financial Recognized at fair value with value changes Recognized at fair value with value changes instruments hedging anticipated operating reported directly in the income statement. reported as part of equity and reclassified Cost 2020 transactions (cash flow hedges) to the income statement when the Opening balance at January 1, 2020 44..33 112299..11 –– 113333..44 anticipated operating transactions occur. Additions – 21.9 – 21.9 Reporting of development costs All immediately expensed. For qualifying new product developments, Closing balance at December 31, 2020 44..33 115511..00 –– 115555..33 capitalized during the development phases and subsequently amortized over the sales Accumulated amortization 2020 lives of the new products while other Opening balance at January 1, 2020 ((44..00)) ((8844..22)) –– ((8888..22)) development costs are immediately Additions – (16.5) – (16.5) expensed. Closing balance at December 31, 2020 ((44..00)) ((110000..77)) –– ((110044..77)) Measurement of pension plan obligation Treated as defined contribution plan. Treated as defined benefit plan with cumu- – lative remeasurements recognized directly Net book values at December 31, 2020 00..33 5500..33 –– 5500..66 in equity. Net book values at December 31, 2019 0.3 44.9 – 45.2 Reporting of operating lease contracts Lease payments are recognized in the Recognized on the balance sheet, reflecting income statement in the period in which right of use assets as well as lease liabilities they are incurred. Payment commitments – except for short-term contracts and low are reported as off-balance sheet value assets. commitments. 2020 Financial Report | 78 2020 Financial Report | 79