§ 77 Tax Act (StG) - Provisions and Value Adjustments

1. Provisions charged to the income statement are permissible insofar as they are necessary to offset impending losses or to settle existing obligations whose legal existence or amount is still indeterminate.

2. Equated with provisions are reserves for research and development contracts with third parties up to 10 percent of taxable profit, but not exceeding a total of 1 million Swiss francs.

3. Value adjustments are permissible insofar as they correspond to a reasonable compensation of the temporary impairment of value that occurred during the tax period.

4. Previous provisions and value adjustments are attributed to the taxable business income insofar as they are no longer justified.

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