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CONSOLIDATED FINANCIALSTATEMENTS
BarryCallebaut
Annual Report2010/11
Borrowing costs
Borrowing costs related to the acquisition, construction, or production of aqualifying asset
arecapitalized in accordance with IAS23.Aqualifying asset is an asset that necessarily takes
asubstantial period of time to get ready for its intended use or sale.
Leased assets
Leases are classified as finance leases whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee.
Assets held under finance leases arestated as assets of the Group at the lower of their
fair value and the present value of the minimum lease payments at inception of the lease,less
accumulated depreciation and impairment losses.The corresponding liability to the lessor is
included in the balance sheet as a finance lease obligation. Finance costs are charged to the
income statement over the term of the relevant lease so as to produce aconstant periodic
interest charge on the remaining balance of the obligations for each accounting period. Leases
where asignificant portion of the risks and rewards of ownership are retained by the lessor
areclassified as operating leases.Rentals payable under an operating lease arecharged to the
income statement on astraight-line basis over the term of the lease.
Financial liabilities
Financial liabilities are initially recognized at fair value, net of transaction costs, when the
Group becomes aparty to the contractual provisions.They aresubsequently carried at amortized
cost using the effective interest rate method. A financial liability is removed from the
balance sheet when the obligation is discharged, cancelled, or expires.
Provisions
Provisions arerecognized when the Group has apresent legal or constructive obligation as a
result of past events and it is probable that an outflow of resources will be required to settle
the obligation, and areliable estimate thereof can be made. Provisions are recorded for
identifiable claims and restructuring costs. Restructuring provisions mainly comprise
employee termination payments. Specific provisions for restructuring costs are recorded at
such time as the management approves the decision to restructure and aformal plan for
restructuring is communicated.
Employeebenefit obligations/Post-employmentbenefits
The liabilities of the Group arising from defined benefit obligations and the related current
service costs are determined on an actuarial basis using the projected unit credit method.
Actuarial gains and losses are recognized in the income statement over the remaining
working lives of the employees to the extent that their cumulative amount exceeds 10% of
the greater of the present value of the obligation and of the fair value of plan assets.
For defined benefit plans,the actuarial costs charged to the income statement consist
of current service cost, interest cost, expected return on plan assets and past service cost,
gains or losses related to curtailments or early settlements as well as actuarial gains or losses
to the extent they are recognized. The past service cost for the enhancement of pension
benefits is accounted for over the period that such benefits vest.
Some benefits are also provided by defined contribution plans; contributions to such
plans are charged to the income statement as incurred.
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