Odfjell SE Annual Report 2012

odfjell group
consolidated financial statements and SIC-12
Consolidation – Special Purpose Entities.
IFRS 10 establishes a single control model
that applies to all entities including special
purpose entities. The changes introduced by
IFRS 10 will require management to exercise
significant judgement to determine which
entities are controlled and therefore are
required to be consolidated by a parent,
compared with the requirements that were
in IAS 27. As a result, the Group has evaluated
the entities to be consolidated pursuant to
IFRS 10 and compared with the requirements
of the current IAS 27.
Within the EU/EEA area, IFRS 10 is effective
for annual periods starting on or after
1.1.2014.
Amendments to IFRS 10, IAS 27 and IFRS 12
related to Investment Entities
Amendments to IFRS 10 imply that enterprises
defined as investment entities no
longer shall consolidate their subsidiaries.
With one exception – subsidiaries engaged in
investment related services to the investment
entity shall be consolidated. Other investments
in subsidiaries, joint ventures and
associates shall be recognised at fair value
through profit and loss. Investment entities
are required to recognise all subsidiaries at
fair value through profit and loss pursuant to
IFRS 10, and present the separate financial
statements as their only financial statements.
The disclosure requirements are extended.
The amendments are effective for annual
periods beginning on or after 1 January
2014, but the EU has not yet approved the
amendments.
IFRS 11 Joint Arrangements
This standard replaces IAS 31 Interests in
Joint Ventures and SIC-13 Jointly-controlled
Entitites – Non-monetary Contributions by
Venturers. IFRS 11 removes the option to
account for jointly controlled entities (JCEs)
using proportionate consolidation. All entities
meeting the definition of a joint venture must
be accounted for using the equity method.
Within the EU/EEA area, IFRS 11 is effective for
annual periods beginning on or after 1 January
2014. The Group expects to account for equity
method in IFRS 11 as of 1 January 2014. It is
expected that changes in IFRS 11 will have
material effect in how Odfjell presents its joint
arrangement. Net result will not be changed,
while total assets will be reduced and equity
ratio will increase. During 2013 Odfjell plan
to separately show how equity method will
affect Odfjell’s financial statement.
IFRS 12 Disclosure of Interests
in Other Entities
IFRS 12 applies for enterprises with interests
in subsidiaries, joint arrangements, associates
and structured entities. IFRS 12 replaces
the disclosure requirements that were
previously included in IAS 27 Consolidated
and Separate Financial Statements, IAS
28 Investments in Associates and IAS 31
Interests in Joint Ventures. A number of
new disclosures are also required, but has
no impact on the Group’s financial position or
performance. Within the EU/EEA area, IFRS
12 is effective for annual periods beginning
on or after 1 January 2014.
IFRS 13 Fair Value Measurement
The standard establishes a single source
of guidance under IFRS for all fair value
measurements, i.e., for requirements of all
standards related to measuring fair value for
assets and obligations. IFRS 13 is effective
for annual periods beginning on or after 1
January 2013.
Annual Improvements 2009–2011
IAS 1 Presentation of Financial Statements
The amendments to IAS 1 clarify the difference
between voluntary additional comparative
information and the minimum required
comparative information. Generally, the presentation
of the previous period’s comparative
information will meet the minimum requirements.
The amendments have no impact on
the Group’s financial position or performance
and are effective for annual periods beginning
on or after 1 January 2013, but the EU has not
yet approved the amendments.
IAS 16 Property, Plant and Equipment
The amendment clarifies that major spare
parts and servicing equipment that meet the
definition of property, plant and equipment
are not inventory. The amendment is effective
for annual periods beginning on or after 1
January 2013, but has not yet been approved
by the EU.
IAS 32 Financial Instruments: Presentation
The amendment clarifies that income taxes
arising from distributions to equity holders
shall be accounted for in accordance with
IAS 12 Income Taxes. The amendment is
effective for annual periods beginning on or
after 1 January 2013, but has not yet been
approved by the EU.
Except from IFRS 11 and IAS 19 Odfjell expect
that changes will have no or only immaterial
effect on the financial statement.
Note 3 Segment information
The operating businesses are organised
and managed separately according to the
nature of the products and services provided,
with each segment representing a strategic
business unit that offers different products
and serves different markets. The Company
has three reportable business segments:
Chemical Tankers, Tank Terminals and LPG/
Ethylene. The Chemical Tankers involve a
'round the world' service, servicing ports
in Europe, North and South America, the
Middle East and Asia, Australia and Africa.
Our fleet composition enables us to offer
both global and regional transportation. Tank
Terminals play an important operational role
in our cargo-consolidation programme so
as to reduce the time our vessels spend in
ports, reduce thereby emission in port, and
enable us to be one of the world-leaders in
combined shipping and storage services.
Odfjell has re-entered into the gas market
in 2012 by acquiring of two modern LPG/
Ethylene carriers. In 2012 this is a small
segment for the Company, but Odfjell will
evaluate further investments in the LPG/
Ethylene market.
Pricing of services and transactions between
business segments are set on an arm’s length
basis in a manner similar to transactions with
third parties. Segment revenue, segment
expenses and segment results include transactions
between business segments. These
transactions are eliminated in consolidation.
The Group provide geographical data for
revenue and total assets, as the reliability
measurement criteria cannot be met for
other items. The Group’s activities are mainly
divided among the following regions: Europe,
North and South America, the Middle East
and Asia, Australia and Africa. Vessels and
newbuilding contracts are not allocated to
specific geographical areas as they generally
trade worldwide.
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odfjell annual report 2012