Unilever 2013 Annual Report Download - page 98

• IFRS 13 ‘Fair value measurement’ explains how to measure
fair value and enhances fair value disclosures. The standard
does not significantly change the measurement of fair value
but codifies it in one place.
• Amendments to IAS 1 ‘Presentation of Financial Statements’
requires items of Other Comprehensive Income that may be
reclassified to profit or loss being presented separately from
items that will never be reclassified.
• Amendments to IAS 16 ‘Property, plant and equipment’
explains that servicing equipment is not classified as inventory
when used for more than one year.
Amendments to IAS 36 ‘Impairment of Assets’ clarifies the
disclosures required in relation to the impairment testing of
goodwill. The Group has adopted this standard from 1 January
2013, which is a year earlier than required, as the changes clarify
the IASB’s original intention; the impact of the standard on the
Group is not material.
NOT ADOPTED BY THE ROUP
The Group is currently assessing the impact of the following new
standards, amendments and interpretations that are not yet
effective.
The Group does not currently believe adoption of these would have
a material impact on the consolidated results or financial position
of the Group. All of the following new standards, amendments and
interpretations are effective from 1 January 2014 unless
otherwise stated. Standards have not yet been endorsed by the EU
unless otherwise stated.
• IFRS 9 ‘Financial instruments’, replaces the current
classification and measurement models for financial assets
with two classification categories: amortised cost and fair
value. Classification is driven by the business model for
managing the assets and the contractual cash flow
characteristics. Financial liabilities are not affected by the
changes. Effective date not set.
• Amendments to IAS 32 ‘Financial instruments: Presentation’
provides additional guidance on when financial assets and
liabilities may be offset. These amendments have been
endorsed by the EU.
• Amendments to IAS 39 ‘Financial Instruments: Recognition
and Measurement’ removes the requirement to discontinue
hedge accounting when a hedge derivative is novated,
providing certain criteria are met. These amendments have
been endorsed by the EU.
• Amendments to IAS 19’ Employee Benefits’ simplifies the
accounting for contributions that are independent of the
number of years of employee service. Effective 1 January 2015.
• IFRIC interpretation 21 ‘Levies’ provides guidance on when to
recognise a liability for a levy imposed by a government.
1 AOUNTIN INFORMATION
AND POLIIES CONTINUED
Information about critical judgements in applying accounting
policies, as well as estimates and assumptions that have the most
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are
included in the following notes:
• separate presentation of items in the income statement – note 3;
• measurement of defined benefit obligations – note 4B;
• key assumptions used in discounted cash flow projections –
note 9;
• utilisation of tax losses and recognition of other deferred tax
assets – note 6B;
• likelihood of occurrence of provisions and contingencies,
including tax investigations and audits – notes 19 and 20; and
• measurement of consideration and assets and liabilities
acquired as part of business combinations – note 21.
REENT AOUNTIN DEVELOPMENTS
ADOPTED BY THE ROUP
The following new and amended standards are relevant to the
Group and have been adopted for the first time in these financial
statements, with no material impact:
• IAS 19 ‘Employee benefits (Revised)’ changes a number of
disclosure requirements and restricts the accounting options
available for defined benefit pension plans. The return on
pension plan assets and finance charge have been replaced by
a net interest expense, calculated by applying the liability
discount rate to the net defined benefit asset or liability.
Administration costs by pension funds will now be recognised
as an expense when the administrative services are
performed.
The revised standard requires retrospective application, and
amounts relating to the year ended 31 December 2012 and
2011 have been restated and labelled as such in these financial
statements. The changes resulted in an increase in operating
expense of €14 million for the year ended 31 December 2013
(€12 million for the year ended 31 December 2012; €13 million
for the year ended 31 December 2011) and an increase in
finance cost of €193 million for the year ended 31 December
2013 (€138 million for the year ended 31 December 2012; €166
million for the year ended 31 December 2011) and a reduction
in the net defined benefit liability of €198 million in the restated
comparative opening balance sheet as at 1 January 2012 (31
December 2012: €233 million), with a corresponding increase
in actuarial gains or losses on pension schemes before tax.
• Amendments to IFRS 7 ‘Financial instruments: Disclosures’
introduces new disclosures of information about the
significance of financial instruments to an entity.
• IFRS 10 ‘Consolidated financial statements’ replaces previous
guidance on control and consolidation.
• IFRS 11 ‘Joint arrangements’ requires joint arrangements to
be accounted for as a joint operation or as a joint venture.
Equity accounting for joint ventures, previously used by
Unilever, has become mandatory.
• IFRS 12 ‘Disclosure of interests in other entities’ requires
enhanced disclosures of the nature, risks and financial effects
associated with the Group’s interests in subsidiaries,
associates, joint arrangements and unconsolidated structured
entities.
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Unlever Annual Report and Accounts 2013 Fnancal statements