CONSOLIDATED FINANCIAL STATEMENTS >
EXPLANATORY NOTES
134
| 2013 ANNUAL REPORT | PRYSMIAN GROUP
B.3 ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS APPLIED IN 2013
The basis of consolidation, the methods applied for translating
foreign company financial statements into the presentation
currency, the accounting standards as well as the accounting
estimates adopted are the same as those used for the
consolidated financial statements at 31 December 2012, except
for the accounting standards and amendments discussed
below and obligatorily applied with effect from 1 January 2013
after being endorsed by the competent authorities.
The Group has applied the accounting standard described
below to the Bond authorised as convertible by the
Shareholders’ Meeting on 16 April 2013.
In accordance with
IAS 32 – Financial Instruments
:
Presentation
, the Bond has been initially recognised at fair
value. Convertible bonds are financial instruments with
a liability component and an equity component. At the
date of issue, the fair value of the liability component is
estimated using the current market interest rate for similar
non-convertible bonds. The difference between the net issue
proceeds and the fair value assigned to the liability component,
representing the embedded option to convert the bonds into
the Group’s shares, is classified in equity as a reserve.
The issue costs are apportioned between the liability
component and the equity component according to their
respective carrying amounts at the date of issue. The cost
apportioned to the equity component is directly deducted from
equity.
The interest expense relating to the liability component is
calculated using the current market interest rate on similar
non-convertible bonds. The difference between this amount
and the interest actually paid is added to the carrying amount
of the convertible bonds.
In subsequent periods, the equity component is not subject to
remeasurement, while the financial liability must be accounted
for at amortised cost, using the effective interest method.
On 12 May 2011, the IASB issued
IFRS 13 - Fair Value
Measurement
, which sets out in a single document the rules
defining the fair value concept and its use for measurement
purposes in the various circumstances permitted by IFRSs.
IFRS 13 also requires specific disclosures about fair value, part
of which replace those required by other standards, including
IFRS 7 - Financial Instruments: Disclosures
.
This standard was published in the Official Journal of the
European Union on 29 December 2012 and applies from the
commencement date of the first financial year starting on or
after 1 January 2013.
The application of this standard is not considered to have a
material impact on the Group’s financial statements with
reference to the measurement of the value of assets and
liabilities, while the disclosures required in the present annual
financial statements are presented in Section D. Financial risk
management.
On 16 June 2011, the IASB issued an amendment to
IAS 1 -
Presentation of Financial Statements
. The amendment requires
entities to group together items within “Other comprehensive
income” based on whether they can or cannot subsequently be
reclassified to profit or loss. This document was published in
the Official Journal of the European Union on 6 June 2012 and
applies to financial years beginning on or after 1 July 2012.
The amendment, applied by the Group as from 1 January 2013,
has resulted in changes to the consolidated statement of
comprehensive income.
On the same date, the IASB published a revised version of
IAS
19 - Employee Benefits
. The changes made to the standard
stipulate that:
• the return on plan assets recognised in net interest ex-
pense must be calculated using the discount rate applying
to plan liabilities and no longer using the expected rate of
return on plan assets;
• past service costs must be recognised immediately in
profit or loss in the period a plan is amended and not on a
straight-line basis over subsequent periods until such time
as the benefits are vested;
• the option to defer the recognition of actuarial gains and
losses, under the “corridor method”, is eliminated;
• the administration costs of managing plan assets must
be recognised in profit or loss at the time the service is
received.
This document was published in the Official Journal of the
European Union on 6 June 2012 and applies to financial years
beginning on or after 1 January 2013, with earlier application
permitted.
The Group has applied
IAS 19
(
revised
) with effect from 1
January 2013. In accordance with the requirements of IAS
8, this standard has been applied retrospectively, and so
the consolidated financial statements at 31 December 2012,
presented in the current annual financial statements for
comparative purposes, have been restated compared with the
previously published figures.
