Ordinary shares are recorded at nominal value. Costs directly attributable to the issuance of new shares are deducted from the shareholders’ equity reserves, net of any related tax benefit.
Own shares are classified in a special item and are deducted from reserves; any subsequent transaction of sale, re-issuance or cancellation will have no impact on the income statement but will affect only shareholders’ equity.
Unrealized gains and losses, net of tax, on financial assets classified as “available for sale” are recorded in shareholders’ equity in the fair value reserve.
The reserve is reversed to the income statement when the asset is realized or when a permanent impairment loss to the said asset is recognized.
The item “Retained earnings (losses)” includes accumulated earnings and balances transferred from other reserves when these become free of any limitations to which they have been subject. This item also shows the cumulative effect of the changes in accounting principles and/or the correction of errors which are accounted for in accordance with IAS 8.