ING Direct 2011 Annual Report Download - page 101

The presentation of, and certain terms used in, the consolidated balance sheet, the consolidated profit and loss account, consolidated
statement of cash flows, consolidated statement of changes in equity and certain notes has been changed to provide additional and more
relevant information or (for changes in comparative information) to better align with the current period presentation. The impact of these
changes is explained in the respective notes when significant.
The comparison of balance sheet items between 31 December 2011 and 31 December 2010 is impacted by the disposed companies as
disclosed in Note 30 ‘Companies acquired and companies disposed’ and by the held for sale classification as disclosed in Note 11 ‘Assets
and liabilities held for sale’.
CHANGES IN ACCOUNTING POLICIES
ING Group changed its accounting policy for the insurance provisions for Guaranteed Minimum Withdrawal Benefits for Life (GMWBL) onthe
Insurance US Closed Block VA book as of 1 January 2011. The revised accounting better reflects the economic value of these guarantees and
more closely aligns accounting practice with peers in the United States. Under the revised accounting policy, the insurance provisions reflect
current market interest rates and current estimates for other assumptions, except for volatility and correlation (which remain unchanged).
INGGroup substantially increased hedging of interest rate risk in the Insurance US Closed Block VA book; the results from these hedging
derivatives are expected to largely mirror the effect of interest changes on the guarantees in future periods. Implementation of the revised
accounting for GMWBL represents a change in accounting policy under IFRS, with a transitional impact being reflected in shareholders’
equity. Comparative years’ results have been restated. Reference is made to Note 56 ‘Impact of change inaccounting policy’ for more
information on comparative years. The combined impact on shareholders’ equity as at 1 January 2011 is EUR651 million (lower equity).
The impact on individual balance sheet line items and previous reporting periods can be specified as follows:
Impact on balance sheet
amounts in millions of euros
31
December
2010
31
December
2009
1
January
2009
Deferred acquisition costs –105 –190 1,146
Insurance and investment contracts 546 148 1,369
Impact before tax – 651 –338 –223
Tax effect 118 78
Shareholders’ equity – 651 –220 –145
The impact on the consolidated profit and loss account can be specified as follows:
Impact on profit and loss account
amounts in millions of euros 2010 2009
Underwriting expenditure –281 –109
Taxation 128 –38
Result after taxation –409 –71
Impact on basic earnings per ordinary share
Amount
(in millions of euros)
Weighted average
number of ordinary
shares outstanding
during the period
(in millions)
Per ordinary share
(in euros)
2010 2009 2010 2009 2010 2009
Basic earnings (before change in accounting policy) 2,779 –1,540 3,781.5 2,686.0 0.73 –0.57
Impact on the profit and loss account –409 –71
Basic earnings (restated) 2,370 –1,611 3,781.5 2,686.0 0.63 –0.60
Impact on diluted earnings per ordinary share
Amount
(in millions of euros)
Weighted average
number of ordinary
shares outstanding
during the period
(in millions)
Per ordinary share
(in euros)
2010 2009 2010 2009 2010 2009
Diluted earnings (before change in accounting
policy) 2,779 –1,540 3,788.1 2,691.7 0.73 –0.57
Impact on the profit and loss account –409 –71
Diluted earnings (restated) 2,370 –1,611 3,788.1 2,691.7 0.63 –0.60
Accounting policies for the consolidated annual accounts of ING Group continued
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
99ING Group Annual Report 2011