Nokia 2012 Annual Report Download - page 226

Amended IAS 19 Employee Benefits discontinues use of the ‘corridor’ approach and re-measurement
impacts will be recognized in other comprehensive income. Net interest as a product of discount rate and
net pension liability will be recognized in the income statements while effect from the difference between
the discount rate and actual return on plan assets will be reflected in remeasurements within other
comprehensive income. Previously unrecognized actuarial gains and losses are also recognized in other
comprehensive income. Other long-term employee benefits are required to be measured in the same
way even though changes in the recognized amounts are fully reflected in profit or loss. Treatment for
termination benefits, specifically the point in time when an entity would recognize a liability for termination
benefits is also revised.
The Group does not currently expect the adoption of the amended IAS 19 to have a material impact on
the financial condition and the results of operations of the Group on a going forward basis. However,
the standard requires retrospective application for all financial statements presented including previous
years. While the Group anticipates virtually no impact to prior period income statements as a result of
the retrospective application, the Group expects change in the net pension liabilities and other
comprehensive income due to the elimination of the ‘corridor approach’. For 2012, there will be an
approximately EUR 240 million (EUR 10 million for 2011) increase in our pension liabilities and
approximately EUR 200 million (EUR 10 million for 2011) decrease, net of tax, in our other
comprehensive income.
The Group will adopt the new standards IFRS 10, IFRS 11, IFRS 12 and IFRS 13 as well as the
amended IAS 19 on their effective date, January 1, 2013.
On 16 December, 2011, the IASB amended the effective date of IFRS 9 to annual periods beginning
on or after 1 January 2015, and modified the relief from restating comparative periods and the
associated disclosures in IFRS 7. The Group will adopt the standards on the revised effective date.
Excluding the impacts of the Amended IAS 19 Employee Benefits, the Group does not expect material
impact from adoption of the other standards effective January 1, 2013.
2. Segment information
Nokia has three businesses: Devices & Services, Location & Commerce and Nokia Siemens Networks,
and four operating and reportable segments for financial reporting purposes: Smart Devices and
Mobile Phones within our Devices & Services business, Location & Commerce and Nokia Siemens
Networks.
Nokia’s reportable segments represent the strategic business units that offer different products and
services. The chief operating decision maker receives monthly financial information for these business
units. Key financial performance measures of the reportable segments include primarily net sales and
contribution/operating profit. Segment contribution for Smart Devices and Mobile Phones consists of
net sales as well as its own, directly assigned costs and allocated costs but excludes major
restructuring projects/programs and certain other items that are not directly related to the segments.
Operating Profit is presented for Location & Commerce and Nokia Siemens Networks. Nokia evaluates
the performance of its segments and allocates resources to them based on operating profit/
contribution.
Smart Devices focuses on Nokia’s most advanced products, including smartphones powered by the
Windows Phone system and has profit-and-loss responsibility and end-to-end accountability for the full
consumer experience, including product development, product management and product marketing.
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