Annual Report 2012 - Swiss Life

114 Consolidated Financial Statements
is measured using the fair value model in IAS 40 Investment Property. The amendment provides
a practical solution to the problem by introducing a presumption that recovery of the carrying
amount will normally be through sale. The amendment applies to annual periods beginning on or
after 1 January 2012. These amendments currently have no impact on the Group’s consolidated
financial statements.
In October 2010, amendments to IFRS 7 Financial Instruments: Disclosures were issued. The amendments
will allow users of financial statements to improve their understanding of transfer transactions
of financial assets (for example securitisations), including understanding the possible effects of
any risks that may remain with the entity that transferred the assets. The amendments also require
additional disclosures if a disproportionate amount of transfer transactions are undertaken around
the end of a reporting period. The amendments apply to annual periods beginning on or after
1 July 2011. The Swiss Life Group is currently not impacted by these amendments.
The following amended Standards and Interpretations are not relevant to the Swiss Life Group:
– Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards
2.3 Consolidation principles
The Group’s consolidated financial statements include the assets, liabilities, income and expenses of
Swiss Life Holding and its subsidiaries. A subsidiary is an entity in which Swiss Life Holding owns
directly or indirectly more than 50% of the voting rights, or in which it otherwise has the power to
exercise control over operations. Subsidiaries are consolidated from the date on which effective control
is obtained. All intercompany balances, transactions and unrealised gains and losses on such transactions
have been eliminated. A listing of the Group’s subsidiaries is set out in note 37. The financial
effect of acquisitions and disposals of subsidiaries is shown in note 29. Associates for which the
Group has between 20% and 50% of the voting rights and/or exercises significant influence are
accounted for using the equity method. The Group’s share of net income for the year is recognised as
a share of profit or loss of associates and the ownership interest in the investment is recorded in the
balance sheet at an amount that reflects its share of the net assets. The Group’s share of net income is
included from the date on which significant influence begins until the date on which significant
influence ceases. Unrealised gains arising from transactions with associates are eliminated to the
extent of the Group’s interest. Unrealised losses are eliminated unless the transaction provides evidence
of an impairment of the asset transferred. The carrying amount includes goodwill on the acquisition.
A listing of the Group’s principal associates is shown in note 16.
Non-controlling interest is the part of profit or loss and net assets of a subsidiary attributable to
equity interest that is not owned, directly or indirectly, through subsidiaries by the parent. The
amount of non-controlling interest comprises the proportion of the net fair value of the identifiable
assets, liabilities and contingent liabilities not attribut able, directly or indirectly, to the parent at the
date of the original acquisition, goodwill attributable to non-controlling interest, if any, and the proportion
of changes in equity not attributable, directly or indirectly, to the parent since the date of
acquisition.
2.4 Foreign currency translation and transactions
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary
economic environment in which the Group’s entities operate (the “functional currency”). The con-
Swiss Life – Annual Report 2012