Panalpina Annual Report 2006

Consolidated and Annual Financial Statements 2006
76 Panalpina Annual Report 2006
IFRIC 4 Determining Whether an Arrangement contains a Lease
The Group adopted IFRIC interpretation 4 as of 1 January 2006, which provides guidance in determining whether
arrangements contain a lease to which lease accounting must be applied. This change in accounting policy has not had
a significant impact on the Group as of 31 December 2006 or 31 December 2005.
IFRIC 5 Right to Interests Arising from Decommissioning, Restoration and Environment Rehabilitation Funds
The amendment with effect for periods beginning from 1 January 2006 establishes the accounting treatment for funds
established to help finance decommissioning for a company’s assets. As the entity does not operate in a country where such
funds exist, this interpretation has had no impact on the financial statements.
IFRIC 8 Scope of IFRS 2
The Group early adopted IFRIC interpretation 8 as of 1 January 2006, which requires IFRS 2 to be applied to any
arrangements where equity instruments are issued for consideration which appears to be less than fair value. As equity
instruments are only issued to employees in accordance with the employee share scheme, the interpretation had no impact
on the financial position of the Group.
The following standards, amendments and interpretations are mandatory for accounting periods beginning on or after
1 January 2006 but are not relevant to the Group’s operations:
• IFRS 1 (amendment) First-time Adoption of International Financial Reporting Standards and IFRS 6 (amendment)
Exploration for an Evaluation of Mineral Resources
• IFRS 6 Exploration for and Evaluation of Mineral Resources
• IFRIC 6 Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment
The following standard and interpretations to existing standards have been published which are mandatory for the Group’s
accounting periods beginning on or after 1 May 2006 or later periods, but which the Group has not early adopted.
IFRS 7 Financial Instruments (Disclosures) and a complementary amendment to IAS 1 Presentation of Financial Statements
(Capital Disclosures) (effective from 1 January 2007)
IFRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of
qualitative and quantitative information regarding exposure to risks arising from financial instruments, including specified
minimum disclosures about credit risk, liquidity risk and market risk, including a sensitivity analysis of market risk. It replaces
IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions and disclosure requirements in IAS
32 Financial Instruments: Disclosure and Presentation. It is applicable to all entities reporting under IFRS. The amendment
to IAS 1 introduces disclosures about the level of an entity’s capital and how it manages capital. The Group assessed the
impact of IFRS 7 and the amendment to IAS 1 and concluded that the main additional disclosures will be the sensitivity
analyses to market risk and the capital disclosures required by the amendment of IAS 1. The Group will apply IFRS 7 and the
amendment to IAS 1 to annual periods beginning 1 January 2007.
IFRS 8 Operating Segments was published in November 2006, and will be effective for accounting periods beginning on or
after 1 Janaury 2009.
IFRS 8 replaces IAS 14 Segmental Reporting. IFRS 8 requires entities to define operating segments and segment
performance in the financial statements based on information used by the chief operating decision-maker. This new
requirements could have an impact on the segments presented, the items reported and their respective measurement. The
Group has not undergone a careful analysis and therefore no final assessment of the impact can presently be made.
IFRIC 10 Interim Financial Reporting and Impairment
The interpretation prohibits the impairment losses recognized in an interim period on goodwill, investments in equity
instruments and investments in financial assets carried at cost to be reversed at a subsequent balance sheet date. The
Group will apply IFRIC 10 as of 1 January 2007, but it is not expected to have any impact on the next year Group’ accounts.
IFRIC 7 Applying the Restatement Approach under IAS 29, Financial Reporting in Hyperinflationary Economies
(Effective from 1 March 2006). IFRIC 7 provides guidance on how to apply the requirements of IAS 29 in a reporting period
in which an entity identifies the existence of hyperinflation in the economy of its functional currency, when the economy was
not hyperinflationary in the prior period.
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC 9 was issued in March 2006, and becomes effective for financial years beginning on or after 1 June 2006. This
interpretation establishes that the date to assess the existence of an embedded derivative is the date an entity first becomes
a party to the contract, with reassessment only if there is a change to the contract that significantly modifies the cash
flows. The Group is still evaluating the effect of this interpretation and expects that the adoption of this interpretation will
have no impact on the Group’s financial statements when implemented in 2007.