Product Development Financial Result Income Taxes Deferred Taxes  Assumptions and Estimates The company is continuously engaged in developing new  products in order to comply with market requirements or market changes. The costs are recorded as an expense at the date of  origin; they are not capitalized since the criteria specified in IAS 38 are not fulfilled. The financial result includes interest income from financial  investments and interest expense from credits. In general, effects from exchange rate fluctuations are included in general  expenses; where such effects resulting from derivative financial instruments are to be allocated directly to an underlying transac- tion, disclosure is made in the respective income statement item. Incomes taxes are determined in accordance with local tax regu- lations in the countries where the respective company is active. Deferred taxes from time differences between the tax and the commercial balance sheet valuation of individual group  companies and from consolidation procedures are netted  according to tax country and disclosed either as deferred tax assets or deferred tax liabilities. Deferred tax assets may also include tax reduction claims resulting from the expected use of existing losses carried forward to subsequent years if their  realization is ensured with sufficient certainty. Deferred taxes are determined on the basis of tax rates applicable for reversal in the individual countries, and are in effect, or announced effect, on  the balance sheet date. Deferred taxes may also result from accounting procedures which are neutral in their effects on  profits.  Deferred tax assets are stated only to the extent that realisation of the respective tax advantage is probable. Value adjustments are created on the basis of past results of operations and  business expectations for the near future, if this criterion is not fulfilled.  Preparation of the consolidated financial statements may involve assumptions and estimates which have an impact on the amount and disclosure of the reported assets and liabilities, on income, expenses and contingencies. Actual values may in some cases  deviate from such assumptions and estimates. Any changes are recognized as expense or income at the time of receiving the respective information. 72 Foreword | Mission | Management Report | Share | Marketing |  Consolidated Financial Statements - IFRS - | Report of Supervisory Board | Board of Management