Accounting standards, Interpretations and Amendments applied in 2010
The following accounting standards, amendments and interpretations were applied for the first time by the Group as from January 1 2010.
· IFRS 3 (2008) – Business Combinations. In accordance with the transition rules for this standard, the Group adopted IFRS 3 (revised in 2008) Business Combinations prospectively for the business combinations which took place as from January 1 2010. More specifically, the revised version of IFRS 3 introduced important changes, as indicated above, which mainly concern: rules for step acquisitions of subsidiaries; the right to measure at fair value any non-controlling interests acquired in a partial acquisition; the recognition of all costs relating to the business combination to the income statement and the recognition at the acquisition date of liabilities for contingent consideration.
· IAS 27 (2008) – Consolidated and Separate Financial Statements. The revisions to IAS 27 principally affect the accounting for transactions and events that result in a change in the Group’s interest in its subsidiaries and the attribution of a subsidiary’s losses to non-controlling interests. In accordance with the relevant transitional provisions, the Group adopted these changes to IAS 27 prospectively, recognizing effects on the accounting treatment of some acquisitions and sales of minority interests in subsidiaries.
IAS 27 (2008) specifies that once control has been obtained, further
transactions whereby the parent entity acquires additional equity interests or
disposes of equity interests without losing control are transactions with
owners and therefore shall be accounted for as equity transactions. It follows
that the carrying amounts of the controlling and non-controlling interests must
be adjusted to reflect the changes in their relative interests in the
subsidiary and any difference between the amount by which the non-controlling
interest is adjusted and the fair value of the consideration paid or received
is recognized directly to equity and attributed to the owners of the parent.
There is no consequential adjustment to the carrying amount of goodwill and no
gain or loss is recognized in the income statement. Costs associated with these
transactions are recognized in equity in accordance with IAS 32 paragraph
Accounting standards, amendments and interpretations effective from January 1 2010 but not applicable to the Group
The following amendments, improvements and interpretations, effective as from January 1 2010, relate to matters that were not applicable to the Group at the date of these financial statements, but which may affect the accounting for future transactions or arrangements:
· Improvement to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations.
· Amendments to IAS 28 – Investments in Associates and to IAS 31 – Interests in Joint Ventures, resulting from the amendment to IAS 27.
· Improvements to IAS/IFRS (2009).
· Amendment to IFRS 2 – Share based Payments: Group Cash-settled Share-based Payment Transactions.
· IFRIC 17 – Distributions of Non-cash Assets to Owners.
· IFRIC 18 – Transfers of Assets from Customers.
· Amendment to IAS 39 – Financial Instruments: Recognition and Measurement: Eligible Hedged Items.
Accounting standards, amendments and interpretations not yet applicable and not adopted early by the Group
The Group did not opt for early adoption of the following standards, interpretations and revisions of standards already published, which will be obligatory in subsequent period:
· IAS 32 – On October 8 2009, the IASB issued an amendment to IAS 32 – Financial Instruments: presentation: classification of rights issues in order to address the accounting for rights issues (rights, options or warrants) that are denominated in a currency other than the functional currency of the issuer. Previously such rights issues were accounted for as derivative liabilities. However, the amendment requires that, provided certain conditions are met, such rights issues are classified as equity regardless of the currency in which the exercise price is denominated. The amendment is applicable retrospectively from January 1 2011. When applied this amendment is not expected to have significant effects of the Group’s financial statements.
· IAS 24 – On November 4 2009 the IASB issued a revised version of IAS 24 – Related Party Disclosures that simplifies the disclosure requirements for government-related entities and clarifies the definition of a related party. The standard is applicable as from January 1 2011. The adoption of this standard is not expected to have any significant effects on the financial statements of the Group.
· IFRS 9 – On November 12 2009 the IASB issued a new standard IFRS 9 – Financial Instruments: the same standard was then amended on October 28 2010. Applicable as from January 1 2013, the new standard represents the completion of the first part of a project to replace IAS 39 and introduces new criteria for classifying and measuring financial assets and liabilities and for derecognizing them from the financial position.
More specifically, the new standard uses a single approach based on how financial instruments are managed and on the characteristics of the contractual cash flows of financial assets to determine how they should be measured, replacing the many different rules in IAS 39. However for financial liabilities, the main change concerns the accounting treatment of changes in fair value of a financial liability designated as a financial liability at fair value through profit and loss, when such changes are due to a change in the credit rating of the same liability. According to the new principle such changes must be recognized to Other total gains and losses and will no longer affect the income statement.
As of the date of these financial statements the new standard had not yet been endorsed by the European Union.
· IFRIC 14 – On November 26 2009 the IASB issued a minor amendment to IFRIC 14 – Prepayments of a Minimum Funding Requirement, which allows entities subject to minimum funding requirements who make an early payment to cover this requirement to recognize this payment as an asset. The amendment is applicable as from January 1 2011. The adoption of this standard is not expected to have any significant effects on the financial statements of the Group.
· IFRIC 19 – On November 26 2009 the IFRIC issued interpretation IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments, which provides guidance on how to account for the extinguishment of a financial liability with the issue of equity instruments. The interpretation clarifies that when an entity renegotiates the terms of a financial liability with its creditor and the creditor agrees to accept the entity’s shares to settle the financial liability, then the shares issued by the company become part of the consideration paid for the extinguishment of the financial liability and must be measured at fair value. The difference between the carrying value of the financial liability extinguished and the initial measurement amount of the equity instruments issued is posted to the income statement for the period. The interpretation is applicable as from January 1 2011. The adoption of this standard is not expected to have any significant effects on the financial statements of the Group.
· IMPROVEMENTS TO IFRS – On May 6 2010 the IASB issued a set of amendments to IFRSs (“Improvements to IFRSs”) which are applicable as from January 1 2011. Below are those which will lead to a change in the presentation, recognition and measurement of financial statement items, excluding those which will involve only a change in terminology or editorial changes with a minimum effect on the accounts, and those that affect standards or interpretations not applicable to the Group:
-
IFRS 3 (2008) – Business
Combinations: this amendment clarifies that the elements of non-controlling
interests that do not entitle their holders to a proportionate share of the
subsidiary’s net assets must be measured at fair value or as required by the
applicable accounting standards. Thus, for example, a stock option plan granted
to employees must be measured, in the event of a business combination,
according to the rules of IFRS 2 while the equity portion of a convertible debt
instrument must be measured in accordance with IAS
- IFRS 7 – Financial Instruments: Additional Disclosures: this amendment emphasizes the interaction between the qualitative and the quantitative disclosures required by the standard concerning the nature and extent of risks inherent in financial instruments. This should assist users of financial statements to link related disclosures and to get an overall picture of the nature and extent of the risks involved in financial instruments. In addition, the disclosure requirement has been eliminated for financial instruments which have passed their expiry date but which have been renegotiated or written down, and also that relating to the fair value of collateral.
- IAS 1 – Presentation of Financial Statements: the amendment require that the reconciliation of the changes in each component of equity be presented in the Notes or in the Financial Statements themselves.
- IAS 34 – Interim Financial Reporting: by providing a series of examples clarification is given regarding the additional information that must be presented in Interim Financial Reports.
The adoption of these amendments is not expected to have any significant effects on the financial statements of the Group.
· IFRS 7 – Financial instruments – additional disclosures –the amendment published on October 7 2010 is applicable for accounting periods beginning on or after July 1 2011. The amendments were issued with the intent of improving the understanding of financial asset transfer transactions, including the understanding of the possible effects of any risk remaining in the company that transferred such assets. The amendments also require greater information if an unusual amount of such transactions are entered into at the end of an accounting period. As of the date of these financial statements these amendments had not yet been endorsed by the European Union.
· IFRS 1- First time Adoption of International Financial Reporting Standards(IFRS)-
the amendment published on December 20 2010 aimed to eliminate references to the date of January 1 2004 which was described as the date of transition to IFRS and to give a guide as to the presentation of financial statements in accordance with IFRS after a period of hyperinflation. These amendments are applicable as from July 1 2011 but as of the date of these financial statements they had not yet been endorsed by the European Union.
· IAS 12 – Income taxes – the amendment issued on December 20 2010 requires businesses to measure the deferred taxes resulting from a functioning asset according to the way in which the carrying value of this asset will be recovered (through continuing use or through a sale). Following this amendment SIC-21 – Income taxes – Recoverability of a non-depreciable asset at revaluation will no longer be applicable. This amendment is applicable from January 1 2012. As of the date of these financial statements these amendments had not yet been endorsed by the European Union.
The adoption of these amendments is not expected to have any significant effects on the financial statements of the Group.
NOTES ON THE BALANCE SHEET