Annual report 2014

New accounting standards and interpretations

The following standards and interpretations that were revised or newly-issued by the IASB (International Accounting Standards Board) or the IFRS Interpretations Committee (IFRS IC), as adopted by the Commission of the European Union, were applicable for the first time beginning with the 2014 financial year:

Enlarge table
IFRS 10 (2011): “Consolidated Financial Statements”
IFRS 11 (2011): “Joint Arrangements”
IFRS 12 (2011): “Disclosure of Interests in Other Entities”
IAS 27 revised (2011): “Separate Financial Statements”
IAS 28 revised (2011): “Investments in Associates and Joint Ventures”
Amendments to IFRS 10, IFRS 11 and IFRS 12 (2012): “Consolidated Financial  Statements, Joint Arrangements and Disclosure of Interests in Other Entities:  Transition Guidance”
Amendments to IFRS 10, IFRS 12 and IAS 27 (2012): “Investment Entities”
Amendments to IAS 32 (2011): “Offsetting Financial Assets and Financial Liabilities”
Amendments to IAS 36 (2013): “Recoverable Amount Disclosures for Non-Financial Assets”
Amendments to IAS 39 (2013): “Novation of Derivatives and Continuation of Hedge Accounting”

IFRS 10 combines the two principles previously governed by IAS 27 and SIC 12 on determining a parent-subsidiary relationship and introduces a new, uniform concept of control. Control now exists if an entity has power over another entity, is exposed to variable returns from its involvement, such as interest or profit sharing, and can use its power to affect these returns.

IFRS 11 governs the accounting of joint arrangements in which several partners exercise joint control. Such control exists if the partners must mutually decide on activities that significantly affect the returns arising from the arrangement. The standard differentiates between joint ventures and joint operations. In the latter, the partners have direct rights to the individual assets, and direct obligations for the individual liabilities relating to the joint arrangement. Accordingly, these assets and liabilities are recognised directly in the consolidated financial statements of the partner. In contrast, with joint ventures the partners have an interest in the net assets or profits of the joint venture. Interests in joint ventures are accounted for using the equity method in the consolidated financial statements.

The initial application of the new or revised consolidation standards IFRS 10, IFRS 11 and IAS 28 resulted in a revised presentation in the Haniel Group’s financial statements. Previously, those shares in METRO AG held jointly by a holding company were presented as loans to or receivables from investments in the consolidated statement of financial position. Since the beginning of the financial year all shares in METRO AG are presented uniformly as investments accounted for at equity. Accordingly, there is a reclassification in the income statement from other net financial income to the result from investments accounted for at equity. All related cash flows are considered in the line item non-cash income/expenses and dividends of investments accounted for at equity as part of the cash flow from operating activities in the statement of cash flows.

The transition guidance provides for retrospective application of the revised consolidation standards. Therefore the previous year’s figures have been adjusted. The following tables summarise the effects on the Haniel Group’s statement of financial position, income statement and the statement of cash flows:

EUR million 31 Dec. 2013 31 Dec. 2012
Assets
Investments accounted for at equity 576 568
Non-current financial assets -554 -546
Receivables from investments and other current assets -22 -22
Total assets 0 0
EUR million 2013
Result from investments accounted for at equity 21
Other net financial income -21
Profit after taxes 0
EUR million 2013
Non-cash income/expenses and dividends of investments accounted for at equity 22
Haniel cash flow 22
 
Change in inventories, receivables and similar assets -11
Cash flow from operating activities 11
 
Proceeds from the disposal of property, plant and equipment, intangible assets  and other assets -5
Payments for investments in property, plant and equipment, intangible assets and  other assets -6
Cash flow from investing activities -11

IFRS 12 bundles and expands the disclosure requirements previously governed in various standards regarding interests in other entities and the resultant risks. In the Haniel Group, the initial application of new disclosure requirements results in particular in new disclosures on significant non-controlling interests in fully consolidated subsidiaries, on consolidated and unconsolidated structured entities and on material investments accounted for at equity.

Beyond that, the first-time application of the revised or new standards in the financial year did not give rise to any effects on the presentation of the Haniel Group’s net assets, financial position, and results of operations.