Rolf Group International Financial Reporting ... - Irish Stock Exchange

Rolf Group
Notes to the Consolidated Financial Statements � 31 December 2006
3 Critical Accounting Estimates, and Judgements in Applying Accounting Policies (Continued)
Estimated income and deferred taxes. Group companies are subject to income tax mainly in the Russian
Federation, where tax, currency and customs legislation is subject to varying interpretations. Significant judgement is
frequently required in estimating liabilities and provisions for income taxes, additional taxes and deferred taxes, which
are carried at a net total of US$ 9,532.
Deferred tax assets for deductible temporary differences and tax loss carry forwards are recorded only to the extent
that there are sufficient taxable temporary differences, or that it is probable that future taxable profit will be available,
against which the deductions can be utilised. In determining future taxable profits and the amount of tax benefits that
are probable in the future, Management makes judgements and applies estimations based on expectations of future
results that are believed to be reasonable under the circumstances. Increases in Management‘s estimates of the
Group’s tax liabilities and decreases in estimates of future taxable profits would reduce profit for the year, and
changes in those estimates in the opposite direction would increase profit for the year, in each case by the same
amount as the change in the estimates. The Group has not recorded a deferred tax liability in respect of taxable
temporary differences of US$ 54,597 (2005: US$ 33,771) associated with investments in subsidiaries as the Group is
able to control the timing of the reversal of those temporary differences and does not intend to reverse them in the
foreseeable future.
Vehicles in transit. Vehicles in transit are accounted for at the time when the risks and rewards of ownership have
been transferred to the Group, usually at the time of shipment from the country of their manufacture. The Group
acquires legal title to these vehicles only when full payment has been made. Financing for vehicles in transit is
accounted for as a liability when the vehicles are in transit and the Group intends to take ownership of the vehicles on
their delivery. Management has made the judgement that the Group acquires the risks and rewards of ownership at
the point of shipment from the port in the country where the cars are manufactured.
4 Adoption of New or Revised Standards and Interpretations, and New Accounting
Pronouncements
Listed below are those new or amended standards or interpretations, effective from 1 January 2006, which in the
future could be relevant to the Group’s operations. The effect of adoption of the new or revised standards and
interpretations on the Group’s financial position at 31 December 2006 and 31 December 2005 and on the results of
its operations for the years then ended was not significant.
IFRIC 4, Determining whether an Arrangement contains a Lease.
IAS 39 (Amendments) � The Fair Value Option, Cash Flow Hedge Accounting of Forecast Intragroup
Transactions, and Financial Guarantee Contracts.
IAS 21 (Amendment) - Net Investment in a Foreign Operation.
IAS 19 (Amendment) - Employee Benefits.
IFRIC 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation
Funds.
IFRIC 6, Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic
Equipment.
The Group has not early adopted the following new standards and interpretations that are mandatory for the Group’s
accounting periods beginning on or after 1 January 2007 or later periods. Management is currently evaluating the
effects that they will have on the Group’s financial statements:
IFRS 7 Financial Instruments: Disclosures and a complementary Amendment to IAS 1 Presentation of
Financial Statements - Capital Disclosures (from 1 January 2007).
IFRS 8, Operating Segments (annual periods beginning on or after 1 January 2009). *
IAS 23 (revised) (annual periods beginning on or after 1 January 2009).*
IFRIC 7, Applying the Restatement Approach under IAS 29 (from 1 January 2007).
IFRIC 8, Scope of IFRS 2 (effective for periods beginning on or after 1 May 2006, that is from 1 January 2007).
IFRIC 9, Reassessment of Embedded Derivatives (annual periods beginning on or after 1 June 2006).
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