English - DFDS

68 NOTEs
DFDS annual report 2009
Reserve for hedging
Reserve for hedging comprise the accumulated net change in fair value of
hedging when qualifying for cash flow hedging, and the hedged transaction
is not yet realised.
Reserve for revaluation of securities
Reserve for revaluation of securities comprises accumulated changes in fair
value of the securities classified as ‘available-for-sale’. The reserve will be
dissolved and transferred to the income statement in line with the selling or
writing down the investment.
Liabilities
Current liabilities are:
n liabilities expected to be settled in the normal course of DFDS’
operating cycle, or
n liabilities due to be settled within twelve months of the balance sheet date.
All other liabilities are classified as non-current liabilities.
Pension obligations and other non-current obligations
Contributions to defined contribution plans are recognised in the income
statement in the period to which they relate and any contributions outstanding
are recognised in the balance sheet as other payables.
Defined benefit plans are subject to an annual actuarial estimate of the
present value of future benefits under the defined benefit plan. The present
value is determined on the basis of assumptions about the future development
in variables such as salary levels, interest rates, inflation and mortality.
The present value is determined only for benefits earned by employees from
employment in the Group. The actuarial present value less the fair value of
any plan assets is recognised in the balance sheet under pensions, cf. below.
Any difference between the expected development in plan assets and
the defined benefit obligation and actual amounts results in actuarial gains or
losses. If the cumulative actuarial gains or losses exceed the greatest of 10%
of the defined benefit obligation or 10% of the fair value of the plan assets,
the gains or losses are recognised in the income statement over the expected
remaining working lives of the employees until pension payments are made.
Actuarial gains or losses not exceeding the above limits are not recognised in
the income statement.
If changes in benefits relating to services rendered by employees in
previous years result in changes in the actuarial present value, the changes are
recognised in the income statement for the year as historical costs, provided
employees have already earned the changed benefits. If employees have not
earned the benefits, the historical costs are recognised in the income statement
over the period in which the employees earn the changed benefits.
Pension plans, considered as a net asset, are recognised as assets only if
the asset equals the value of future repayments, or it will result in reduced
payments.
Other non-current personnel obligations include jubilee benefits, etc.
Other provisions
Other provisions are recognised where a legal or constructive obligation has
been incurred as result of past events, and it is probable that it will lead to an
outflow of resources that can be reliably estimated. Provisions are recognised
for the estimated ultimate liability that is expected to arise, taking into account
the foreign currency effects and the time-related monetary value.
Interest bearing liabilities
Amounts owed to mortgage credit institutions and banks, relating to loans
which the Group expects to hold to maturity, are recognised at the date of
borrowing at the net proceeds received less the transaction costs paid.
In subsequent periods, the interest bearing liabilities are measured at
amortised cost, corresponding to the capitalised value using the effective interest
rate. Accordingly, the difference between the proceeds and the nominal
value is recognised in the income statement under ‘financial costs’ over the
term of the loan.
Interest bearing liabilities also include the capitalised residual obligation on
financial leases. Other liabilities are recognised at amortised cost.
Other payables
Other payables comprise amounts owed to staff, including wages, salaries and
holiday pay. Amounts owed to public authorities include payable withholding
tax, VAT, excise duties, real property taxes, etc., and amounts owed in connection
with purchase/disposal of ships, buildings and terminals, interest expense,
fair value of hedges, amounts due in respect of loss on ships and costs related
to shipping operations, etc. Other payables also include amounts owed regarding
defined contribution plans.
Deferred income
Includes payments received no later than at the balance sheet date but which
relate to income in subsequent years.
Cash flow statement
The cash flow statement has been prepared using the indirect method and
shows the consolidated cash flow from operating, investing, and financing
activities for the year, and the consolidated cash and cash equivalents at the
beginning and end of the year.
The cash flow effect of acquisition and disposal of enterprises is shown
separately in cash flows from investing activities.
Cash flow from the acquisition of enterprises is recognised in the cash
flow statement from the date of acquisition. Cash flow from the disposal of
enterprises is recognised up to the date of disposal.
Cash flow from operating activities is calculated on the basis of the profit/loss
before amortisation and depreciation and financing, net and adjusted
for non-cash operating items, changes in working capital, payments relating
to financial items and corporation tax paid. Cash flow from investment
activities includes payments in connection with the acquisition and disposal of
enterprises and activities and of non-current intangible assets, tangible assets
and investments. Cash flow from financing activities includes changes in the
size or composition of the Group’s share capital, payment of dividends to
shareholders and the obtaining and repayment of mortgage loans and other
long-term and short-term debt. Cash and cash equivalents comprise cash.
Significant estimates and judgements of accounts
The preparation of financial statements in conformity with IFRS requires the
management to make estimates and assumptions for future events, which affect
the reported amounts of assets and liabilities, contingent assets and liabilities,
and also income and costs. The management base their estimates on historical
experience and various other assumptions that are believed to be reasonable
under the circumstances. The results of this form the basis of estimating the reported
accounting values of assets and liabilities as well as the reported income
and costs, which do not appear directly from other material. The estimates and
assumptions might be incomplete and inaccurate, and unexpected events or circumstances
might occur. Furthermore, the actual outcome might diverge from
these estimates due to certain risks and instabilities.
Estimates and judgements are assessed regularly. Changes in accounting
estimates are recognised in the period when the estimates are changed and
are moving forward.
Estimates and judgements made by the management that have an essential
influence on the annual report and judgement with considerable risk that
actual amounts might diverge from the amounts estimated by the management,
are stated in Note 40.