2007 Annual Report - Sappi

Notes to the group annual financial statements continued
for the year ended September 2007
2. Accounting policies continued
disclosure reconciling the headline earnings to the earnings
applied in the earnings per share calculation.
Specific departures from the old formula are as follows:
• Not all gains or losses on the closure, sale or termination of
a business will automatically be excluded from headline
earnings.
• A new approach is required for the recognition of a deferred
tax asset of the acquiree, following a business combination.
• Additional adjustments for any linked unit (where a share and
debenture trade as a linked unit).
• reclassification adjustments relating to components of other
comprehensive income.
This revised standard is effective for our September 2010
year end.
IFRS 7 – Financial instruments: disclosures
The IFRS essentially combines IAS 30 – Disclosure in the
Financial Statements of Banks and similar Financial Institutions
and IAS 32 – Financial Instruments: Presentation. The disclosure
requirements under IAS 32 have been expanded to include
sensitivity analyses as well as disclosure of classes of financial
assets and liabilities.
This circular has not had a material impact on our reported
headline earnings per share.
2.6 Potential impact of future changes in
accounting policies
The following standards and interpretations, which have been
issued but which are not yet effective and which are applicable
to Sappi, have not been applied in these financial statements:
IAS 1 – Amendment to International Accounting
Standard 1 – Presentation of financial statements:
capital disclosures
The amendment requires the group to disclose information that
will enable users of its financial statements to evaluate the
entity’s objectives, policies and processes of managing capital.
The amendment first becomes applicable to the group for the
financial year ending September 2008.
Revised IAS 1 – Presentation of financial statements
The main changes from the previous standard require that an
entity must present:
• all non-owner changes in equity (that is, ‘comprehensive
income’) either in one statement of comprehensive income or
in two statements (a separate income statement and a
statement of comprehensive income);
• a statement of financial position (balance sheet) as at the
beginning of the earliest comparative period in a complete
set of financial statements when the entity applies an
accounting policy retrospectively or makes a retrospective
restatement;
• income tax relating to each component of other comprehensive
income; and
The standard first becomes applicable to the group for the
financial year ending September 2008, and we are currently
assessing the impact of this on the group.
IFRS 8 – Operating segments
This IFRS introduces the concept of an operating segment; it
expands the identification criteria for segments of an entity and
the measurement of segment result. This statement will allow an
entity to align its operating segment reporting with the internal
identification and reporting structure.
The standard first becomes applicable to the group for the
financial year ending September 2010, and we are currently
assessing the impact of this on the group.
IFRIC 10 – Interim financial reporting
The interpretation addresses an apparent conflict between the
requirements of IAS 34 – Interim financial reporting and those
in other standards on the recognition and reversal in financial
statements of impairment losses on goodwill and certain
financial assets. The interpretation concludes that an entity shall
not reverse an impairment loss recognised in a previous interim
period in respect of goodwill, or an investment in either an
equity instrument or a financial asset carried at cost.
The interpretation first becomes applicable to the group for the
financial year ending September 2008, and we are currently
assessing the impact of this on the group.
IFRIC 11 – Group and treasury share transactions
This interpretation addresses two issues. The first is whether
the transactions should be accounted for as equity settled or as
cash-settled share-based payment arrangements, and the
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sappi limited | 07 | annual report