English - DFDS

64 NOTEs
DFDS annual report 2009
Minority interests
In the consolidated financial statements, the items of subsidiaries are recognised
in full. The minority interests’ proportionate shares of the subsidiaries’
results and equity are adjusted annually and recognised separately in the
proposed profit appropriation and statement of changes in equity.
Business combinations
Enterprises acquired or formed during the year are recognised in the consolidated
financial statements from the date of acquisition or formation. Enterprises
disposed of are recognised in the consolidated financial statements until
the date of disposal. The comparative figures are not adjusted for acquisitions
or disposals.
Acquisitions of enterprises in which the Parent Company will be able to
exercise control are accounted for using the purchase method. The cost of
an acquisition is measured as the fair value of the assets given and liabilities
incurred or assumed at the date of acquisition, plus costs directly attributable
to the acquisition. In case components of the consideration are linked up to
future events, these components are included in the cost of acquisition to the
extent that the events are probable and the determination of the consideration
is reliable. Identifiable assets, liabilities and contingent liabilities acquired
in a business combination are measured initially at their fair values at the acquisition
date. The excess of the cost of acquisition over the fair value of the
Group’s share of the identifiable net assets acquired is recorded as goodwill.
Negative goodwill (badwill) is recognised as income in the income statement
at the time of the acquisition.
Positive and negative balances from the acquirees might be adjusted until
12 months from the date of the acquisition provided that the initial recognition
was preliminary or incorrect. All other adjustments are recognised in the
income statement.
Goodwill is allocated at the date of acquisition to the lowest cash-generating
unit to which the goodwill within reason is attributable. The allocation of
goodwill to cash-generating units is mentioned in Note 11 and 39.
For business combinations achieved in stages, goodwill and negative goodwill
are measured at each transaction using the above-described method until
control is obtained. Share of profit or loss is recognised using the acquired
ownership at each stage of transaction. For business combinations achieved in
stages after control is obtained, goodwill and negative goodwill are measured
as the difference between the cost of the additional acquisition and the carrying
amount of the acquired net assets.
Gains or losses on subsidiaries and associates disposed of are stated as
the difference between the sales amount or disposal costs and the carrying
amount of net assets at the date of disposal, including the carrying amount of
goodwill, accumulated exchange gains and losses previously recognised in the
equity plus anticipated disposal costs.
Translation of foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are
measured using the currency of the primary economic environment in which
the entity operates. The consolidated financial statements are presented in
Danish Kroner (DKK), which is the functional and presentation currency of
the Group.
Translation of transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rate prevailing at the date of transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement,
except when deferred in equity as qualifying for cash flow hedges.
Translation differences on non-monetary items are reported as part of
the fair value gain or loss.
Fixed assets acquired in foreign currency are translated at the exchange
rate prevailing at the date of transaction. Gains and losses on hedges relating
to the acquisition of fixed assets are recognised as part of the fixed asset.
Translation of group companies
Financial statements of foreign subsidiaries are translated into Danish Kroner
at the exchange rates at the balance sheet date for assets and liabilities and at
average exchange rates for income statement items.
The above exchange gains and losses (exchange rate adjustments) are
recognised in a separate reserve in the equity. At full or partial realisation
of the net investment the exchange rate adjustments are recognised in the
income statement.
Derivative financial instruments
Derivative financial instruments are recognised in the balance sheet at fair values
on the transaction date. The fair values of derivative financial instruments
are presented as other receivables if positive or other liabilities if negative.
Netting of positive and negative derivative financial instruments is only
performed if the company is entitled to and has the intention to settle more
derivative financial instruments as a net. All fair values are computed on the
basis of current market data and generally accepted valuation methods.
Fair value hedge
Changes in the fair value of derivative financial instruments designated as
and qualifying for recognition as a fair value hedge of recognised assets and
liabilities are recognised in the income statement together with changes in
the value of the hedged asset or liability with respect to the hedged portion.
Hedging of future cash flows according to agreements, except for foreign currency
hedges, is treated as a fair value hedge of a recognised asset and liability.
Cash flow hedge
Changes in the portion of the fair value of derivative financial instruments
designated as and qualifying as a cash flow hedge and which effectively hedge
changes in the value of the hedged item are recognised in the comprehensive
income. The effective part of the change in the fair value is recognised as a separate
equity reserve until the cash flow hedge effect the income statement.
If the hedged transaction results in gains or losses, amounts previously recognised
in equity are transferred to the same item in the income statement as
the hedged item.
For derivative financial instruments that do not qualify for hedge accounting,
the hedge is dissolved. As soon as the cash flow hedge effect the
income statement, the accumulated changes in fair value that are previously
recognised in equity are transferred to the income statement.
For derivative financial instruments that are no longer realised, the accumulated
changes are transferred immediately to the income statement.
Net investment hedge
Changes in the fair value of derivative financial instruments used to hedge net
investments in foreign subsidiaries or associates and which effectively hedge
currency fluctuations in these companies are recognised in the consolidated
financial statements directly in a separate translation reserve in equity.
Other derivative financial instruments
For derivative financial instruments that do not fulfil the requirements of
being handled as hedge instrument, the changes in fair value are recognised
successive in the income statement as financial income and expenses.
Government grants
Government grants related to funding for investments are offset against the
cost of the non-current fixed asset and reduce the depreciation of the assets
for which the grants are awarded.