7. Changes in accounting and valuation methods and changes in the reporting structure

7.1. Presentation of the income statement according to the cost of sales method

In the 2013/2014 Nordzucker consolidated financial statements, the income statement has been prepared using the cost of sales method for both the reporting period and the comparative period. In previous annual reporting periods, the income statement was prepared using the nature of expense method. The transition is a result of the fact that the cost of sales method has become the more common method on both a national and international level. It is also used predominantly in the industry. As such, switching over to the cost of sales method will facilitate the comparison of the Nordzucker consolidated financial statements.

7.2. Changes resulting from IAS 19

Within the Nordzucker Group, an amended version of IAS 19 (published in 2011) was applied for the first time in the 2013/2014 reporting period. The first-time application is made retrospectively, i.e. it must be accounted for as if the new guidelines had always been used. As a result, amounts from the comparative period must be adjusted. For significant retrospective adjustments, IAS 1 additionally requires the preparation of an additional (third) balance sheet at the beginning of the comparative period. Adjustments for earlier periods that are not shown in the financial statements are offset against the value on the opening balance sheet for each equity component affected in the earliest period presented.

For the Nordzucker Group, the following amendments to the regulations in IAS 19 have an effect on the presentation of the net assets, financial and earnings position:

  • In terms of pension provisions, the abolition of the corridor method will lead to the immediate recognition of actuarial gains and losses, as well as of past service costs. This results in the fact that at the end of each reporting period the full amount of the net liability (defined benefit obligation less plan assets) is presented.
  • In conjunction with pension provisions, the expected return on plan assets or on reimbursements no longer has to be recognised as interest income in the income statement. Instead, interest income for the reporting period must be calculated on the basis of the discount rate at which the defined benefit obligation was determined at the end of the previous reporting period. The difference between the actual return on plan assets or on reimbursements for the reporting period and the interest income calculated based on the discount rate represents a gain or loss as a result of the remeasurement of the plan asset or reimbursement. This gain or loss must be recognised outside of profit or loss under other comprehensive income (i.e. in the statement of comprehensive income).
  • For other provisions, there are changes with regard to the value of obligations from partial early retirement agreements. On the basis of previous regulations, the top-up amounts were treated in the same way as benefits arising from the termination of an employment relationship (termination benefits), i.e. they were recorded as liabilities in their full amount at the time the benefits were approved. With the revision of IAS 19, the definition of termination benefits has been changed; it now no longer includes any payments in exchange for future work. This also affects the top-up amounts, which are now no longer accountable as termination benefits, but are recognised proportionally over the vesting period as a provision according the rules of other long-term employee benefits. As a consequence, partial early retirement obligations were previously overstated on the basis of the revised IAS 19.

The following table shows the effects of the changes in accounting methods for pension and partial early retirement obligations on the balance sheet and result:

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in EUR thousands




Retained earnings




of which adjustments within the income statement




Administrative expenses




Financial income




Financial expenses




Income taxes




Other comprehensive income
(including non-controlling interests, including deferred taxes)




Provisions for pensions and similar obligations (non-current)




Other provisions (non-current)




Deferred tax assets




If the Nordzucker Group were to continue applying the old version of IAS 19, the net expenses recorded in the income statement for pension provisions in the reporting period would exceed those calculated under the new version of IAS 19 by EUR 231 thousand. Under the hypothetical application of the old version of IAS 19, the pension provisions shown in the balance sheet would have been EUR 32,149 thousand lower as of the reporting date than on the basis of the new version of IAS 19; as a result, the equity shown in the balance sheet, adjusted for deferred taxes, would have been correspondingly higher.