Unilever 2015 Annual Report Download - page 101

FOREIN URRENIES
The consoldated fnancal statements are presented n euros
Thefunctonal currences of NV and PL are euros and sterlng
respectvely Items ncluded n the fnancal statements of
ndvdual group companes are recorded n ther respectve
functonal currency whch s the currency of the prmary economc
envronment n whch each entty operates
Foregn currency transactons n ndvdual group companes are
translated nto functonal currency usng exchange rates at the
date of the transacton Foregn exchange gans and losses
fromsettlement of these transactons, and from translaton
ofmonetary assets and labltes at year-end exchange rates,
arerecognsed n the ncome statement except when deferred
n equty as qualfyng hedges
In preparng the consoldated fnancal statements, the balances n
ndvdual group companes are translated from ther functonal
currency nto euros The ncome statement, the cash flow
statement and all other movements n assets and labltes
are translated at average rates of exchange as a proxy for the
transacton rate, or at the transacton rate tself f more
approprate Assets and labltes are translated at year-end
exchange rates
The ordnary share captal of NV and PL s translated n
accordance wth the Equalsaton Agreement The dfference
between the value for PL and the value by applyng the
year-end rate of exchange s taken to other reserves (see note
15B on page 117)
The effect of exchange rate changes durng the year on net assets
of foregn operatons s recorded n equty For ths purpose net
assets nclude loans between group companes and any related
foregn exchange contracts where settlement s nether planned
nor lkely to occur n the foreseeable future
The roup apples hedge accountng to certan exchange
dfferences arsng between the functonal currences of a foregn
operaton and NV or PL as approprate, regardless of whether the
net nvestment s held drectly or through an ntermedate parent
Dfferences arsng on retranslaton of a fnancal lablty
desgnated as a foregn currency net nvestment hedge are
recorded n equty to the extent that the hedge s effectve These
dfferences are reported wthn proft or loss to the extent that the
hedge s neffectve
umulatve exchange dfferences arsng snce the date of
transton to IFRS of 1 January 2004 are reported as a separate
component of other reserves In the event of dsposal or part
dsposal of an nterest n a group company ether through sale or
as a result of a repayment of captal, the cumulatve exchange
dfference s recognsed n the ncome statement as part of the
proft or loss on dsposal of group companes
RITIAL AOUNTIN ESTIMATES AND JUDEMENTS
The preparaton of fnancal statements requres management to
make udgements, estmates and assumptons n the applcaton of
accountng polces that affect the reported amounts of assets,
labltes, ncome and expenses Actual results may dffer from
these estmates Estmates and udgements are contnuously
evaluated and are based on hstorcal experence and other
factors, ncludng expectatons of future events that are beleved to
be reasonable Revsons to accountng estmates are recognsed
n the perod n whch the estmate s revsed and n any future
perod affected
1 AOUNTIN INFORMATION
AND POLIIES
The accountng polces adopted are the same as those whch were
appled for the prevous fnancal year, except as set out below
under the headng ‘Recent accountng developments’
UNILEVER
The two parent companes, NV and PL, together wth ther group
companes, operate as a sngle economc entty (the Unlever
roup, also referred to as Unlever or the roup) NV and PL have
the same Drectors and are lnked by a seres of agreements,
ncludng an Equalsaton Agreement, whch are desgned so that
the postons of the shareholders of both companes are as closely
as possble the same as f they held shares n a sngle company
The Equalsaton Agreement provdes that both companes adopt
the same accountng prncples It also requres that dvdends and
other rghts and benefts attachng to each ordnary share
of NV, be equal n value to those rghts and benefts attachng to
each ordnary share of PL, as f each such unt of captal formed
part of the ordnary share captal of one and the same company
BASIS OF ONSOLIDATION
Due to the operatonal and contractual arrangements referred to
above, NV and PL form a sngle reportng entty for the purposes
of presentng consoldated fnancal statements Accordngly, the
fnancal statements of Unlever are presented by both NV and PL
as ther respectve consoldated fnancal statements roup
companes ncluded n the consoldaton are those companes
controlled by NV or PL ontrol exsts when the roup has the
power to drect the actvtes of an entty so as to affect the return
on nvestment
The net assets and results of acqured busnesses are ncluded n
the consoldated fnancal statements from ther respectve dates
of acquston, beng the date on whch the roup obtans control
The results of dsposed busnesses are ncluded n the
consoldated fnancal statements up to ther date of dsposal,
beng the date control ceases
Intra-group transactons and balances are elmnated
The company ncome statement for NV s ncluded n the
consoldated fnancal statements An abbrevated ncome
statement has been dsclosed n the NV company accounts on
page 148 n accordance wth Secton 402, Book 2 of the
Netherlands vl ode
OMPANIES LEISLATION AND AOUNTIN STANDARDS
The consoldated fnancal statements have been prepared n
accordance wth Internatonal Fnancal Reportng Standards (IFRS)
as adopted by the European Unon (EU), IFRI Interpretatons and n
accordance wth Part 9 of Book 2 of the vl ode n the Netherlands
and the UK ompanes Act 2006 applcable to companes reportng
under IFRS They are also n complance wth IFRS as ssued by the
Internatonal Accountng Standards Board (IASB)
These fnancal statements are prepared under the hstorcal cost
conventon unless otherwse ndcated
These fnancal statements have been prepared on a gong
concern bass Refer to the gong concern statement on page 84
AOUNTIN POLIIES
Accountng polces are ncluded n the relevant notes to the
consoldated fnancal statements These are presented as text
hghlghted n grey on pages 96 to 147 The accountng polces
below are appled throughout the fnancal statements
94 Unilever Annual Report and Accounts 2015Financial statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS
UNILEVER ROUP