Annual Report 2010 - Falck

56 Falck Annual Report 2010 | Group
Notes to the Group financial statements
Note
1 Accounting policies
The annual report for the year ended 31 December 2010
includes both the consolidated financial statements of Falck
A/S and its subsidiaries (the Group) and the separate financial
statements of the parent company.
The annual report of Falck A/S is presented in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the EU and additional Danish disclosure requirements for
annual reports for accounting class C large, cf. the IFRS Order
issued pursuant to the Danish Companies Act. The annual
report also complies with the International Financial Reporting
Standards as issued by the IASB.
The Board of Directors and the Executive Management Board
considered and approved the annual report for 2010 of Falck
A/S on 15 March 2011. The annual report will be submitted
to the shareholders of Falck A/S for adoption at the annual
general meeting to be held on 29 April 2011.
The annual report has been prepared under the historical cost
convention, except that the following assets and liabilities are
measured at fair value: derivative financial instruments and
financial instruments at fair value.
The annual report is presented in DKK rounded to the nearest
million.
NEW FINANCIAL REPORTING REGULATIONS
The following standards and interpretations have been implemented
effective for financial years beginning on or after 1
January 2010:
• IFRS 3 Business Combinations (revised 2008)
• IAS 27 Consolidated and Separate Financial Statements
(revised 2008)
• Amendments to IAS 32 Financial Instruments: Presentation;
IAS 39 Financial Instruments: Recognition and Measurement;
IFRIC 9 Reassessment of Embedded Derivatives:
Presentation; and amendments to IAS 39 Eligible Hedged
Items, eligable for hedge accounting
• IFRIC 17 Distributions of Non-cash Assets to Owners.
• Amendments to IFRS 2 Group Share-based Payment Transactions
• Improvements to IFRS standards April 2009
• IFRIC 18 Transfers of Assets from Customers
For the Falck A/S Group, IFRS 3 (2008) and IAS 27 (2007) will
apply to transactions completed on or after 1 January 2010.
The standards include a number of new provisions, the most
important being:
• Alternative methods of recognition of goodwill related to
non-controlling interests’ share of an acquiree. The election
is made on a transaction-by-transaction basis.
• Acquisition costs and changes in contingent consideration
(earn-outs) are recognised directly in the income statement.
• Specification of requirements of separate recognition of
acquired intangible assets.
• Step acquisitions result in revaluation to fair value in the
income statement of the investment already held.
• Gains/losses on the divestment of investments resulting in
a loss of control are recognised in the income statement.
At the same time, any retained investment in the operation
must be remeasured at fair value through profit or loss.
• Acquisitions/divestments of non-controlling interests without
loss of control are recognised directly in equity.
• Revaluation of obligations to acquire non-controlling interests
in connection with business combinations are recognised
in equity.
With the exception of the implementation of IFRS 3 Business
Combinations, and IAS 27 Consolidated and Separate Financial
Statements, the implementation of these financial reporting
standards, improvements and interpretations has not affected
recognition and measurement in 2010. The effect of IFRS 3
and IAS 27 was a reduction of profit for the year by DKK 22
million and a reduction of equity and balance sheet (goodwill)
by DKK 49 million and diluted earnings per share by DKK 0.2.
The accounting policies set out below have been consistently
applied to the financial year and the comparative figures.
BASIS OF CONSOLIDATION
Group and subsidiaries
The Group financial statements consolidate the accounts of
the parent company, Falck A/S, and the subsidiaries in which
Falck A/S directly or indirectly holds a majority of the votes or
in any other way exercises a controlling interest. In assessing
control, potential voting rights that are exercisable as of the
balance sheet date are taken into account.
The Group financial statements are prepared on the basis of
the financial statements of Falck A/S and subsidiaries by adding
items of a like nature.
The financial statements used for consolidation are prepared
in accordance with the Group’s accounting policies.
In the consolidation, investments in subsidiaries, intercompany
income and expenses, intercompany balances and gains
and losses on transactions between Group companies are
eliminated.