Siegfried Annual Report 2009

Notes to the Consolidated Financial
Statements
Accounting principles Group
Financial Statements The Consolidated Financial Statements
of the Siegfried Group (Siegfried) comply with the
International Financial Reporting Standards (IFRS). The Consolidated
Financial Statements are based on historical costs,
except the revaluation of specific financial assets and liabilities,
such as derivative financial instruments and availablefor-sale
financial assets. As described in the following policies,
these are assessed at fair value. The Siegfried registered
shares are listed on the Swiss stock exchange SIX. The Board
of Directors approved the Consolidated Financial Statements
on March 3, 2010.
Estimates and Valuations In compliance with IFRS, the
compilation of the Consolidated Financial Statements
requires estimates and the use of company-wide accounting
and valuation procedures by management. Estimates and
assumptions for activities of key importance to the Group
Financial Statements and those judged more complex and
needing additional leeway are explained under these Notes
under the caption “Significant accounting judgments and
estimates”. Actual results may vary from the estimates.
Revised accounting standards In 2008 the Siegfried
Group early adopted IFRS 8 “Operating segments”, which
was required to be implemented from 1 January 2009 at
the latest. Therefore there have been no further adjustments
to this Year-end report.
IAS 1 (revised) «Presentation of financial statements» –
effective January 1, 2009 Amongst other matters, the
revised standard requires some changes to the format of
the statement of comprehensive income, the statement of
changes in equity and additional disclosures in the notes to
the consolidated financial statements. The changes from the
implementation of the revised standard are purely presentational
and have no impact on the results and financial position
of the Siegfried Group.
IAS 23 (revised) «Borrowing costs» The revised standard
requires capitalization of borrowing costs relating to qualifying
assets as part of the cost of these assets. Previously the
Group immediately recognized all borrowing costs as an
expense. In the reporting period 2009, no material qualifying
assets for capitalizing borrowing cost were identified, so that
the revised Standard (IAS 23) had no impact on the consolidated
financial statements ended 31 December 2009.
IFRS 7 «Financial instruments – Disclosures» (amendment)
- effective January 1, 2009 The amendment
requires enhanced disclosures about fair value measurement
and li-quidity risk. As the change only results in additional
disclosures, there is no impact on the results and the financial
position of the Siegfried Group.
IFRS 2 (amendment) «Share-based payments» - effective
January 1, 2009, deals with vesting conditions and
cancellations. The amendment had no impact on the group’s
financial statements.
Future changes in accounting principles
The Group is currently assessing the potential impact of the
new and revised standards and interpretations that are effective
from January 1, 2010 and later and have not been
applied early. This applies in particular to IFRS 3 (revised)
“Business Combinations”, IAS 27 (revised) “Consolidated
and Separate Financial Statements”, IAS 38 (amended),
“Intangible Assets”, IFRS 5 (amendment), “Measurement of
non-current assets (or disposal groups). It is anticipated that
these and further revised and amended standards will have
no significant impact on the results and the financial position
of the Siegfried Group.
Changes in accounting principles
Development costs for Generic dossiers are capitalized
according to the stage of the project, if all relevant capitalization
criteria’s are fulfilled. In the past capitalized project
costs were recorded under inventories and as a rule separately
compensated by the clients during the development
phase. Over the past years, the business environment has
continuously changed. The projects are more and more complex,
with longer development periods and higher amounts
involved. Further the projects costs are now recovered mainly
by future margins on production. Management has decided
to adapt the accounting treatment to the changed business
model, as this will result in more relevant information to the
users of the financial statements. Development costs are
new capitalized as intangibles and amortized over the duration
of the contract. The amortization starts with the market
entry (start of production). Down-payments during the
development phase are recorded as a liability (deferred
income) in the Balance Sheet, they are recognized in the
income statement on an accrual basis over the duration of
the production contract. The opening Balance Sheet as of
January 1, 2008 has been restated accordingly. The impact
on earnings per share for the year 2008 is immaterial. The
following table shows the impact on the Balance Sheets,
the Income statements and Cash flow statements previously
presented:
72 Financial Statements Siegfried Group