6. Accounting standards not applied
No IFRSs were voluntarily applied ahead of time in the consolidated financial statements of Nordzucker AG as of 28 February 2014. The pronouncements will be taken into account for the first time when their application becomes mandatory. The application of IFRS requires the European Union (EU) to first grant approval (endorsement process), which in some cases is still outstanding.
In addition, the Nordzucker Group has not yet applied IFRS 8 Operating Segments or IAS 33 Earnings per Share; their application is only mandatory for capital market related companies.
The amendments listed below are not likely to have any major impact on the presentation of the net assets, financial and earnings position or the cash flows of the Nordzucker Group.
6.1. Mandatory first-time application in the 2014/2015 reporting period
The following pronouncements are to be applied for the first time in the Nordzucker consolidated financial statements as of 28 February 2015:
- Amendment to IAS 27 Consolidated and Separate Financial Statements (in future: Separate Financial Statements);
- Amendment to IAS 28 Investments in Associates (in future: Investments in Associates and Joint Ventures);
- IFRS 10 Consolidated Financial Statements;
- IFRS 11 Joint Arrangements;
- IFRS 12 Disclosure of Interests in Other Entities;
- Amendments to IFRS 10, IFRS 11 and IFRS 12 (designation of the amendments: Consolidated Financial Statements, Joint Agreements and Disclosure of Interests in Other Entities: Transition Guidance, as well as Investment Entities);
- Amendment to IAS 32 (designation of the amendment: Presentation – Offsetting Financial Assets and Financial Liabilities);
- Amendment to IAS 36 Impairment of Assets (designation of the amendment: Recoverable Amount Disclosure for Non-Financial Assets);
- Amendment to IAS 39 Financial Instruments: Recognition and Measurement (designation of the amendment: Novation of Derivatives and Continuation of Hedge Accounting);
- IFRIC 21 Levies (not yet endorsed by the EU).
The amendments to IAS 27 and IAS 28, as well as IFRSs 10 to 12, have brought about changes in the guidelines for consolidated accounting:
- Following the adoption of IFRS 10 and IFRS 12, the scope of IAS 27 is limited to accounting for subsidiaries, joint ventures and associated companies in separate financial statements. In addition, the scope of IAS 28 has been extended to cover the application of the equity method to joint ventures as well as to associated companies.
- IFRS 10 replaces the previous regulations on consolidated accounting in IAS 27 and SIC-12. The standard defines a uniform concept of control, which is applied to all companies including special purpose entities.
- IFRS 11 replaces IAS 31 and SIC-13. IFRS 11 abolishes the previous option of accounting for joint ventures using the proportional consolidation method, i.e. joint ventures now have to be accounted for using the equity method.
- IFRS 12 contains uniform rules for disclosures in the area of consolidated accounting and consolidates the disclosures on subsidiaries that were previously governed by IAS 27, the disclosures on joint ventures and associated companies previously defined in IAS 31 and IAS 28 respectively and those for structured entities.
The amendment to IAS 32 includes clarifications on offsetting financial instruments, although it retains the existing basic rules.
The amendment to IAS 36 requires the provision of disclosures regarding the recoverable amount for assets or cash-generating units for which impairments were made or reversed during the reporting period.
The amendment to IAS 39 allows, under certain conditions, for the continuation of hedge accounting with derivatives which are transferred to a central clearing house.
IFRIC 21 determines that a company active in a particular market must recognise a liability for the levies for the relevant authorities in the market if the business activity causing the levy takes place. For levies dependent on a certain minimum volume being reached, for example, the interpretation clarifies that the liability can only be recognised as such once this minimum volume has been reached.
6.2. Mandatory first-time application in the 2015/2016 reporting period or later
These standards or amendments are to be applied to the Nordzucker consolidated financial statements for the first time as of 29 February 2016 or for later reporting periods:
- Amendment to IAS 19 Employee Benefits (designation of the amendment: Employee Contributions; not yet endorsed by the EU);
- Improvements to International Financial Reporting Standards (2010–2012 Cycle; published in 2013; not yet endorsed by the EU);
- Improvements to International Financial Reporting Standards (2011–2013 Cycle; published in 2013; not yet endorsed by the EU);
- IFRS 9 Financial Instruments (published 2009, 2010) and subsequent amendments to IFRS 9 and IFRS 7 (designation of the amendments: Mandatory Effective Date and Transition Disclosures – Amendments to IFRS 9 and IFRS 7; published in 2011) and to IFRS 9, IFRS 7 and IAS 39 (designation of the amendments: IFRS 9 Financial Instruments – Hedge Accounting and Amendments to IFRS 9, IFRS 7 and IAS 39; published in 2013); not yet endorsed by the EU.
- IFRS 14 Regulatory Deferral Accounts (not yet endorsed by the EU).
The amendment to IAS 19 governs the recognition of contributions made by employees or third parties to pension plans to reduce the service cost insofar as the reduction reflects the service rendered during the reporting period.
The IASB makes amendments to various IFRSs via its overarching ‘Improvements to International Financial Reporting Standards’. The 2010–2012 cycle amended a total of seven standards; the 2011–2013 cycle amended four.
IFRS 9 is to replace the existing regulations in IAS 39 regarding accounting for financial instruments. The standard is being developed by the IASB in a series of stages and will then be published. EU adoption of the standard will only begin once the IASB has completed all the stages. IFRS 9 contains new regulations on categorisation and measuring financial assets as well as on accounting for hedging relationships. The existing guidelines on the categorisation and measurement of financial liabilities will largely be retained.
IFRS 14 will make it possible to continue using previously applied accounting guidelines to account for regulatory deferred income items from price regulations during the transition to the new IFRS.