Unilever 2010 Annual Report Download - page 133

130 Unilever Annual Report and Accounts 2010
Financial statements
Notes to the company accounts Unilever N.V.
Accounting information and policies
Basis of preparation
The company accounts of Unilever NV comply in all material respects
with legislation in the Netherlands. As allowed by Article 362.1 of
Book2 of the Civil Code in the Netherlands, the company accounts are
prepared in accordance with United Kingdom accounting standards,
unless such standards conflict with the Civil Code in the Netherlands
which would in such case prevail.
The accounts are prepared under the historical cost convention as
modified by the revaluation of financial assets classified as
‘available-for-sale investments’, ‘financial assets at fair value through
profit orloss’, and ‘derivative financial instruments’ in accordance with
theaccounting policies set out below which have been
consistentlyapplied.
Accounting policies
The principal accounting policies are as follows:
Fixed investments
Shares in group companies are stated at cost less any amounts written
off to reflect a permanent impairment. Any impairment is charged
tothe profit and loss account as it arises. In accordance with Article
385.5 of Book 2 of the Civil Code in the Netherlands, Unilever N.V.
shares held by Unilever N.V. subsidiaries are deducted from the carrying
value of those subsidiaries. This differs from the accounting treatment
under UK GAAP, which would require these amounts to beincluded
within fixed investments.
Financial instruments and derivative financial instruments
The company’s accounting policies under United Kingdom
generallyaccepted accounting principles (UK GAAP) namely FRS 25
‘FinancialInstruments: Presentation’, FRS 26 ‘Financial Instruments:
Measurement’ and FRS 29 ‘Financial Instruments: Disclosures’ are
thesame as the Unilever Group’s accounting policies under
International Financial Reporting Standards (IFRS) namely IAS 32
‘Financial Instruments: Presentation’, IAS 39 ‘Financial Instruments:
Recognition and Measurement’ and IFRS 7 ‘Financial Instruments:
Disclosures’. The policies are set out under the heading ‘Financial
instruments’ in note 1 to the consolidated accounts on pages 77
and78. NV is taking the exemption for not providing all the financial
instruments disclosures, because IFRS 7 disclosures are given in
note15to the consolidated accounts on pages 98 to 104.
Deferred taxation
Full provision is made for deferred taxation on all significant timing
differences arising from the recognition of items for taxation purposes
in different periods from those in which they are included in the
company’s accounts. Full provision is made at the rates of tax prevailing
at the year end unless future rates have been enacted or substantively
enacted. Deferred tax assets and liabilities have not been discounted.
Own shares held
Own shares held by the company are accounted for in accordance
withDutch law and UK GAAP, namely FRS 25 ‘Financial Instruments:
Presentation’. All differences between the purchase price of the shares
held to satisfy options granted and the proceeds received for the
shares, whether on exercise or lapse, are charged to other reserves.
Retirement benefits
Unilever N.V. has accounted for pensions and similar benefits under the
United Kingdom Financial Reporting Standard 17 ‘Retirement benefits’
(FRS 17). The operating and financing costs of defined benefit plans are
recognised separately in the profit and loss account; service costs are
systematically spread over the service lives of employees, and financing
costs are recognised in the periods in which they arise. Variations from
expected costs, arising from the experience of the plans or changes
inactuarial assumptions, are recognised immediately in the statement
ofcomprehensive income. The costs of individual events such as
pastservice benefit enhancements, settlements and curtailments
arerecognised immediately in the profit and loss account. The
liabilitiesand, where applicable, the assets of defined benefit plans
arerecognised at fair value in the balance sheet. The charges to the
profit and loss account for defined contribution plans are the company
contributions payable and the assets of such plans are not included
inthe company balance sheet.
Dividends
Under Financial Reporting Standard 21 ‘Events after the Balance Sheet
Date’ (FRS 21), proposed dividends do not meet the definition of a
liability until such time as they have been approved by shareholders at
the Annual General Meeting. Therefore, we do not recognise a liability
in any period for dividends that have been proposed but will not be
approved until after the balance sheet date. This holds for external
dividends as well as intra-group dividends paid to the parent company.
Taxation
Unilever N.V., together with certain of its subsidiaries, is part of a tax
grouping for Dutch corporate income tax purposes. The members
ofthe fiscal entity are jointly and severally liable for any taxes payable
by the Dutch tax grouping.
Fixed investments € million € million
1 January
(a)
Additions
(b)
Decreases
31 December
(a) The additions relate to two inve
2010
26,289
1,136
(131)
27,294
stments in group companies
2009
26,245
3,840
(3,796)
26,289
and to
capital injections in the subsidiary Unilever Finance International B.V.
(b) Thedecreases relate to the divestment of two group companies.
Debtors € million € million
2010 2009
Loans to group companies 3,913 3,242
Other amounts owed by group companies 3,188 1,668
Taxation 10 28
Other
Of which due after more than one year
57 44
7,168 4,982
3,386 3,242