Kia 2010 Annual Report Download - page 54

Notes to Consolidated
Financial Statements
December 31, 2010 and 2009
2010
North Consolidation Consolidated
In millions of won Domestic America Europe Others adjustments amounts
Gross sales ￦ 23,316,488 12,939,454 14,228,949 5,405,965 (13,600,516) 42,290,340
Inter-company sales (7,093,705) (2,687,327) (3,819,484) - 13,600,516 -
Net sales ￦ 16,222,783 10,252,127 10,409,465 5,405,965 - 42,290,340
Operating income ￦ 1,686,646 159,561 94,727 431,351 463,825 2,836,110
Total assets ￦ 19,116,875 4,183,877 6,852,844 2,692,586 (5,253,023) 27,593,159
34. Geographic Segment Information
The Company conducts business globally and is managed geographically. The following tables provide information on each geographic
segment for the years ended December 31, 2010 and 2009:
(a) Results of operations and total assets, by region where the Parent Company and its subsidiaries for the year ended and as of December 31,
2010 are located, are as follows:
(b) Results of operations and total assets, by region where the Parent Company and its subsidiaries for the year ended and as of December 31,
2009 are located, are as follows:
2009
North Consolidation Consolidated
In millions of won Domestic America Europe Others adjustments amounts
Gross sales ￦ 18,464,713 7,130,940 11,689,539 4,046,724 (12,074,524) 29,257,392
Inter-company sales (6,876,314) (1,133) (5,197,077) - 12,074,524 -
Net sales ￦ 11,588,399 7,129,807 6,492,462 4,046,724 - 29,257,392
Operating income ￦ 1,147,331 (81,590) (681,513) 153,263 657,715 1,195,206
Total assets ￦ 17,247,011 4,303,613 6,704,765 2,221,537 (4,514,050) 25,962,876
35. Subsequent Event
The Company which is a part of Hyundai Motor Group Consortium, signed a stock acceptance contract to acquire shares of Hyundai
Engineering & Construction Co., Ltd. with the shareholder council of Hyundai Engineering & Construction Co., Ltd. on March 4, 2011. As
a result of the stock acceptance contract the Company will acquire 5,831,850 shares (5.23% of total stock) of Hyundai Engineering &
Construction Co., Ltd. paying ￦744,010 million within one month after the contract.
36. Planning and Adoption of K-IFRS
(a) K-IFRS Adoption Plan and current status of progress
The Parent Company subsequently plans to issue financial statements prepared in accordance with K-IFRS from 2011. In August of 2008, the
Parent Company organized a Task Force Team to perform preliminary analysis of the effects of K-IFRS adoption and establish accounting systems
to apply the new accounting treatments, and trained its relevant personnel internally and externally. The Task Force Team regularly reports the
details and status of the Adoption Plan to its board of directors and management. The details of the K-IFRS Adoption Plan are as follows:
Main Activities Preparation Plan State at December 31, 2010
Formation of the K-IFRS Adoption
Task Force Team and analysis
of the likely effects of K-IFRS
adoption
Training
Alignment of accounting
systems
Complete the K-IFRS Adoption Plan
by the end of 2010
Acquire the skills required for K-IFRS
conversion by the end of Nov. 2010
Complete the establishment of
accounting systems to apply the
new accounting treatments under
K-IFRS by the end of Dec. 2010
Aug. 2008 – Established the K-IFRS Adoption Task Force Team
Aug. 2008 - Engaged an accounting firm to carry out an analysis
of the likely effects of K-IFRS adoption
Aug. 2009 – Held training for headquarters staff
Sep. 2010 – Held training for foreign subsidiaries staff
Completed the analysis of the scope of required changes to the
system
The establishment of accounting systems under K-IFRS
(b) Differences between accounting under K-IFRS and under K-GAAP
Area K-IFRS Current (K-GAAP)
Financial asset
Employee benefits
The Company records the discount of account receivables
when substantially all risks and rewards are transferred
Under the Projected Unit Credit Method, the Company recognizes
a defined benefit obligation calculated using an actuarial technique
and a discount rate based on the present value of the projected
benefit obligation
The Company records
the discount of account
receivables when control is
transferred
The Company establishes
an allowance for severance
liability equal to the amount
which would be payable if
all employees left at the end
of the reporting period
First-time
adoption of
K-IFRS
Investments in subsidiaries, joint
ventures and associates under
separate financial statements
Changes in scope of consolidation
Business
combinations
Cumulative translation
differences
Investments in
subsidiaries
Borrowing costs
K-IFRS 1103 (Business Combinations) will not be applied
retroactively to business combinations occurring prior to January 1,
2010 (the date of transition to K-IFRS)
The cumulative translation difference of foreign operations as of January
1, 2010 (the date of transition to K-IFRS) will be regarded as nil
Carrying amount of investments in subsidiaries, joint venture and
associates under previous GAAP for separate financial statements
are recorded at cost on the date of transition to K-IFRS
Interest expenses are capitalized after January 1, 2010 (the date of
transition to K-IFRS)
Apply cost method
Regardless of amount of total assets, a subsidiary over which a
parent company has control is consolidated
Not applicable
Not applicable
Not applicable
All interest is presented as
expense
Apply equity method
A subsidiaries whose total
assets are less ￦10 billion is
excluded from consolidation
108 COMPONENTS OF SUSTAINABLE GROWTH 109
KIA MOTORS ANNUAL REPORT 2010