Unilever 2008 Annual Report Download - page 91

Notes to the consolidated accounts Unilever Group
88 Unilever Annual Report and Accounts 2008
Financial statements
1 Accounting information and policies (continued)
Retirement benefits
Pension accounting requires certain assumptions to be made in order
to value our obligations and to determine the charges to be made
to the income statement. These figures are particularly sensitive to
assumptions for discount rates, mortality, inflation rates and expected
long-term rates of return on assets. Details of assumptions made are
given in note 20 on pages 115 to 117.
Taxation
The Group is subject to taxes in numerous jurisdictions. Significant
judgement is required in determining worldwide provision for taxes.
There are many transactions and calculations during the ordinary
course of business for which the ultimate tax determination is
uncertain. The Group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the
income tax and deferred tax provisions in the period in which such
determination is made.
Provisions
Provision is made, among other reasons, for legal matters, disputed
indirect taxes, employee termination costs and restructuring where
a legal or constructive obligation exists at the balance sheet date and
a reliable estimate can be made of the likely outcome. The nature of
these costs is such that judgement has to be applied to estimate the
timing and amount of cash outflows.
Recent accounting developments
We are currently assessing the impact of the following revised
standard or interpretation. These changes are not expected to have a
material impact on the Group’s results of operations, financial position
or disclosures.
• Amendments in IAS 1 ‘Presentation of Financial Statements’
(effective for annual periods beginning on or after 1 January 2009)
requiring information in financial statements to be aggregated on
the basis of shared characteristics and introducing a statement of
comprehensive income.
• Amendments in IAS 23 ‘Borrowing Costs’ (effective for annual
periods beginning on or after 1 January 2009) removing the option
for expensing borrowing costs and requiring mandatory
capitalisation of qualifying borrowing costs.
• IFRS 8 'Operating Segments' (effective for annual periods beginning
on or after 1 January 2009) introduces a management reporting
approach to segment reporting. The information reported would be
that which management uses internally for evaluating the
performance of operating segments and allocating resources to
those segments. It replaces disclosure requirements in IAS 14
'Segment Reporting'.
• Amendments in IFRS 3 ‘Business Combinations’ and IAS 27
‘Consolidated and Separate Financial Statements’ (effective for
annual periods beginning on or after 1 July 2009) changing and
updating the existing requirements or practice on accounting for
partial acquisitions, step acquisitions, acquisition-related costs,
contingent consideration and transactions with non-controlling
interests.
• Amendment to IAS 38 ‘Intangible Assets’ (effective for annual
periods beginning on or after 1 January 2009) clarifies the
accounting for advertising expenditure.
• IFRIC 16 ‘Hedges of a Net Investment in a Foreign Operation’
(effective for annual periods beginning on or after 1 October 2009).
• IFRIC 17 ‘Distributions of Non-cash Assets to Owners’ (effective for
annual periods beginning on or after 1 July 2009).
• IFRIC 18 ‘Transfers of Assets from Customers’ (effective for annual
periods beginning on or after 1 July 2009).