Kia 2012 Annual Report Download - page 57

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(c) Functional and presentation currency
The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional currency and the currency of
the primary economic environment in which the Company operates.
(d) Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within
the next fiscal year are included in the following notes:
• Note 16 : Employee Benefits
• Note 17 : Provisions
• Note 18 : Commitments and Contingencies
• Note 27 : Income Taxes
(e) Changes in accounting policies
(i) Changes in accounting policies
① Financial Instruments: Disclosures
The Company has applied the amendments to K-IFRS No.1107, ‘Financial Instruments: Disclosures’ since January 1, 2012. The
amendments require disclosing the nature of transferred assets, their carrying amount, and the description of risks and rewards
for each class of transferred financial assets that are not derecognized in their entirety. If the Company derecognizes transferred
financial assets but still retains their specific risks and rewards, the amendments require additional disclosures of their risks.
② Presentation of financial statements
The Company adopted the amendments to K-IFRS No. 1001, ‘Presentation of Financial Statements’ from the annual period ended
December 31, 2012. The Company’s operating profit is calculated as revenue less: (1) cost of goods sold, and (2) selling, general
and administrative expenses, and is presented separately in the consolidated statement of income.
(ii) Impact of change in accounting policy
The Company retrospectively applied the amendment to K-IFRS No. 1001, for which the impact is as follows:
2012 2011
Operating profit before adoption of the amendments
₩
3,558,326 3,525,146
Changes :
Other income (Note 26) (417,339) (457,378)
Other expense (Note 26) 381,264 431,320
Operating profit after adoption of the amendments
₩
3,522,251 3,499,088
(In millions of won)
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