Unilever 2011 Annual Report Download - page 116

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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
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
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 ‘Capital and treasury risk management’ in note
16 to the consolidated accounts on pages 93 to99. 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 90 to 92.
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
totalrecognised gains and losses. 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
2011
€ million
2010
1 January 27,294 26,289
Additions(a) 1,178 1,136
Decreases(b) (46) (131)
31 December 28,426 27,294
(a) The additions relate to capital injections in the subsidiary Unilever Finance
International B.V.
(b) Thedecrease relates to the divestment of shares in a group company.
Debtors
€ million
2011
€ million
2010
Loans to group companies(c) 4,436 3,913
Other amounts owed by group companies(c) 3,628 3,188
Taxation 62 10
Other 67 57
8,193 7,168
Of which due after more than one year –3,386
(c) Amounts owed by group companies include balances with several group
companies which are interest bearing at market interest rates and are
unsecured and repayable on demand if this is the case.
Unilever Annual Report and Accounts 2011
Financial statements