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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
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On 18 December 2014, the IASB also published amendments to
IFRS 10
,
IFRS 12
and
IAS 28
with the aim
of clarifying the consolidation rules applying to investment entities
.
As at the present document date, the
European Union had not yet completed the endorsement process needed for the application of these
amendments.
On 13 January 2016, the IASB published the new standard
IFRS 16 - Leases
which will replace
IAS 17
. The
new accounting standard requires lessees to adopt a uniform accounting treatment for both operating and
finance leases. In fact, IFRS 16 requires the lessee to recognise assets and liabilities for both operating and
finance leases unless the lease term is 12 months or less or the underlying asset has a low value.
As at the present document date, the European Union had not yet completed the endorsement process
needed for the application of this standard, which will apply to financial years beginning on or after 1 January
2019.
On 19 January 2016, the IASB published a number of amendments to
IAS 12 - Income Taxes
. These aim to
clarify how to account for deferred tax assets related to debt instruments measured at fair value and will
apply to financial years beginning on or after 1 January 2017.
B.5 TRANSLATION OF TRANSACTIONS IN CURRENCIES OTHER THAN THE FUNCTIONAL
CURRENCY
Transactions in currencies other than the functional currency of the company which undertakes the
transaction are translated using the exchange rate applicable at the transaction date.
Prysmian Cables and Systems S.A. (Switzerland), P.T. Prysmian Cables Indonesia (Indonesia), Draka NK
Cables (Asia) Pte Ltd (Singapore), Draka Philippines Inc. (Philippines), Prysmian Metals Limited (Great
Britain), Draka Durango S. de R.L. de C.V., Draka Mexico Holdings S.A. de C.V. and NK Mexico Holdings
S.A. de C.V. (Mexico) present their financial statements in a currency other than that of the country they
operate in, as their main transactions are not conducted in the local currency but in the reporting currency.
Foreign currency exchange gains and losses arising on completion of transactions or on the year-end
translation of assets and liabilities denominated in foreign currencies are recognised in the income statement.
B.6 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at the cost of acquisition or production, net of accumulated
depreciation and any impairment. Cost includes expenditure directly incurred to prepare the assets for use,
as well as any costs for their dismantling and removal which will be incurred as a consequence of contractual
or legal obligations requiring the asset to be restored to its original condition. Borrowing costs directly
attributable to the acquisition, construction or production of qualifying assets are capitalised and depreciated
over the useful life of the asset to which they refer.