Annual Report 2002 - Agfa

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Associates Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group’s share of the total recognized gains and losses of associates on an equity accounting basis, from the date that significant influence effectively commences until the date that significant influence effectively ceases. When the Group’s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate. 1. Significant accounting policies continued Transactions eliminated on consolidation All intra-group balances and transactions, and any unrealized gains arising on intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with associates are eliminated to the extent of the Group’s interest in the enterprise. Unrealized gains arising from transactions with associates are eliminated against the investment in the associate. Unrealized losses are eliminated in the same way as unrealized gains except that they are only eliminated to the extent that there is no evidence of impairment. (d) Foreign currency Foreign currency transactions In the individual Group companies, transactions in foreign currencies are recorded at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the balance sheet date. Foreign exchange differences arising on translation are recognized in the income statement. Financial statements of foreign operations The Group’s foreign operations are not considered an integral part of the Company’s operations. Accordingly, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Euro at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Euro at the annual average foreign exchange rates. Foreign exchange differences are recognized directly in equity. The financial statements of foreign operations in hyperinflationary economies are translated into the local company’s measurement currency (mostly the USD) as if it was the operation’s functional currency. As a result, non-monetary assets, liabilities and related income statement accounts are remeasured using historical rates in order to produce the same result in terms of the reporting currency that would have occurred if the underlying transaction was initially recorded in this currency. Agfa annual report 2002 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Significant accounting policies continued (e) Derivative financial instruments The Group uses derivative financial instruments primarily to manage its exposure to interest rate and foreign currency risks arising from operational, financing and investment activities. In accordance with its treasury policy, the Group does not currently hold or issue derivatives for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments. Derivative financial instruments are recognized initially at cost. Subsequent to initial recognition, derivative financial instruments are stated at fair value. Recognition of any resultant gain or loss depends on the nature of the item being hedged (accounting policy f). Derivative financial instruments that are either hedging instruments that are not designated or do not qualify as hedges are carried at fair value with changes in value included in the income statement. The fair values of derivative interest contracts are estimated by discounting expected future cash flows using current market interest rates and yield curve over the remaining term of the instrument. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price. (f) Hedging Cash flow hedges Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognized asset or liability, a firm commitment or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is recognized directly in equity. When the firm commitment or forecasted transaction results in the recognition of an asset or liability, the cumulative gain or loss is removed from equity and included in the initial measurement of the acquisition cost or other carrying amount of the asset or liability. Otherwise the cumulative gain or loss is removed from equity and recognized in the income statement at the same time as the hedged transaction. The ineffective part of any gain or loss is recognized in the income statement immediately. Any gain or loss arising from changes in the time value of the derivative financial instrument is excluded from the measurement of hedge effectiveness and is recognized in the income statement immediately. When a hedging instrument or hedge relationship is terminated but the hedged transaction still is expected to occur, the cumulative gain or loss at that point remains in equity and is recognized in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss recognized in equity is recognized in the income statement immediately. 43 Agfa annual report 2002
Page 1 and 2: annual report 2002
Page 3 and 4: Share of Group Sales 2002 BY BUSINE
Page 5 and 6: Letter to the shareholders Dear sha
Page 7 and 8: Board of Management (February 25, 2
Page 9 and 10: Group Sales 2002 MILLION EUROS Sale
Page 11 and 12: Key Figures Balance sheet (MILLION
Page 13 and 14: Operating Cash Flow (MILLION EUROS)
Page 15 and 16: ” Working with Quebecor on the De
Page 17 and 18: ” Together with colleagues from H
Page 19 and 20: ” We do not have to persuade our
Page 21 and 22: ” We are now able to completely i
Page 23 and 24: ” I love it when a customer asks
Page 25 and 26: ” I feel proud that each year my
Page 27 and 28: ” Many photographers who switched
Page 29 and 30: ” The great success of our new di
Page 31 and 32: Corporate Governance Apart from the
Page 33 and 34: CORPORATE GOVERNANCE Mr Chaffart re
Page 35 and 36: Agfa-Gevaert Group Financial Statem
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Page 41: NOTES TO THE CONSOLIDATED FINANCIAL
Page 45 and 46: NOTES TO THE CONSOLIDATED FINANCIAL
Page 89 and 90: SUMMARY VERSION OF STATUTORY ACCOUN
Page 91 and 92: SUMMARY VERSION OF STATUTORY ACCOUN
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Glossary The words explained in thi
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PET film PET is an abbreviation for
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AGFA-GEVAERT GROUP CONSOLIDATED STA
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AGFA-GEVAERT GROUP CONSOLIDATED STA
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Annual Report 2002 - Agfa

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