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CONSOLIDATED FINANCIALSTATEMENTS
BarryCallebaut
Annual Report2010/11
futures in afair value hedge relationship. The hedged firm commitments previously fair
valued under the fair value hedge accounting model with regard tothe sales price risk of its
raw material components including cocoa and non-cocoa components such as dairy,
sweeteners and nuts, are no longer fair valued in the new model, but carried as executory
contracts off-balance sheet.
The modification primarily affects the amounts recognized for inventories and firm sales
commitments on the balance sheet and the allocation of the amounts between cash flow
positions “Fair value (gain) loss on hedged firm commitments” and “Fair value (gain) loss on
inventories” resulting in ashift between line items within operating cash flow.
At August 31, 2010, balance sheet included inventories carried at fair value in the amount of
CHF 941.8 million, whereas in the balance sheet at August 31, 2011, the inventories are
carried at lower of cost or net realizable value in the amount of CHF 1,065.7 million. In fiscal
year 2009/10, the firm sales commitments were hedged, therefore afair value gain/loss was
included in the balance sheet amounting to CHF 56.9 million. In fiscal year 2010/11, fair value
hedge accounting for the commodity price risk components of firm sales commitments was
terminated.
Changes in accounting estimates
During its annually performed review of the useful lives of assets,the Group has come to the
conclusion that certain strategic software-related assets have auseful life longer than the
previously used maximum term of 5years.Consequently,any new software projects as well
as qualifying items with a residual value have been assessed and useful lives adapted
according to the outcome.The useful life span for software intangibles has therefore been
increased to not exceeding 8years. The effect of the reassessment of useful lives led to a
decrease of the amortization charge for fiscal year 2010/11 by CHF 2.2 million, which is
accounted for as achange in estimates in accordance with IAS8.
Amended International Financial Reporting Standards and Interpretations which became
effectivefor this financial year
IFRS 2 – Share-based Payments (effectiveJanuary1,2010)
These amendments clarify the accounting for group-settled share-based payment transactions.Inthese
arrangements,the subsidiary receives goods or services from employers or
suppliers,but its parent or another entity in the group must paythose suppliers.Anentity that
receives goods or services in ashare-based arrangement must account for those goods or
services no matter which entity in the group settles the transaction and no matter whether the
transaction is settled in shares or cash. The IASB additionally clarified that in IFRS 2a
“group” has the same meaning as in IAS 27 – Consolidated and Separate Financial
Statements.The adoption of the amendment did not result in amaterial impact on the presentation
of the Group’s result of operations, financial position and cash flows.
IAS32–Financial Instruments: Classification of rights issued (effectiveFebruary1,2010)
Under the amendment rights, options and warrants otherwise meeting the definition of
equity instruments in IAS 32issued to acquire afixed number of an entity’s own nonderivative
equity instruments for a fixed amount in any currency are classified as equity
instruments provided the offer is made prorata to all existing owners of the same class of the
entity’s own non-derivative equity instruments. The adoption of the amendment did not
result in amaterial impact on the presentation of the Group’s result of operations, financial
position and cash flows.
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