Annual Report 2006

1.4 Events after the balance sheet date The Board of
Directors approved the consolidated financial statements
at its meeting of February 23, 2007. The approval of the
consolidated financial statements by the Annual General
Meeting is scheduled for April 30, 2007.
There have been no events between December 31, 2006
and February 23, 2007 that have caused an adjustment of
the carrying amounts of the Group’s assets and liabilities or
that the Group is required to disclose here.
2. Significant Accounting Policies
2.1 Consolidation
2.1.1 Scope and method of consolidation The consolidated
financial statements include Mikron Holding AG,
Biel and all Swiss and foreign subsidiaries which the parent
company, directly or indirectly, controls either by holding
more than 50% of the voting rights or by some other form
of control. These entities are fully consolidated, whereby
assets, liabilities, income and expenses are incorporated in
the consolidated accounts. Intercompany balances and transactions,
as well as gains arising from such transactions, are
eliminated in full. Minority interests in equity and net earnings
of consolidated companies are presented separately,
but as a component of consolidated equity and consolidated
net earnings respectively. Capital consolidation is
based on the purchase method applied on the annual financial
statements of all consolidated entities, prepared as at
December 31, determined according to uniform accounting
policies. Companies acquired are consolidated from the
date on which control is obtained, while companies sold are
excluded from the scope of consolidation as of the date on
which control is given up.
Companies in which the parent company has an interest of
at least 20% but less than 50%, or over which it otherwise
has significant influence, are included in the consolidated
financial statements using the equity method of accounting
and presented as investments in associates. Investments with
a voting power of less than 20% are stated at fair value and
presented under other financial assets. The Mikron Group
Notes to the Consolidated Financial
Statements 2006 of the Mikron Group
does not currently have any shareholdings with a voting
power of less than 50%.
The list of Group companies can be found on page 82.
2.1.2 Acquistions and goodwill Acquisitions of subsidiaries
are accounted for using the purchase method. The
costs of a business combination are the fair values, at
the date of exchange, of assets given, liabilities incurred
or assumed and equity instruments issued, in exchange
for control of the acquiree. Additionally, any third-party
costs directly attributable to the business combination are
included.
Any amount in excess of these costs of acquisition is
recorded as goodwill. After initial recognition, the Group
measures goodwill at cost less any accumulated impairment
losses. If the calculations result in an amount which is less
than the fair value (“negative goodwill“), then the Mikron
Group reviews those calculations. Any negative goodwill
remaining following the revised assessment is recognized as
income immediately.
2.1.3 Discontinued operations Operations and noncurrent
assets that have been disposed of or which are
expected to be sold within one year are reported as discontinued
operations in accordance with IFRS 5 “Non-current
Assets Held for Sale and Discontinued Operations“. Assets
and liabilities from operations held for sale are disclosed in
the balance sheet at the lower of carrying amount and fair
value less costs to sell.
The prior-year figures in the income statement and the cash
flow statement, but not in the balance sheet, are restated
and can thus be compared.
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