Annual Report 2012 - Swiss Life

131 Consolidated Financial Statements
Insurance contracts issued to a defined benefit pension plan covering own employees have generally
been elim inated. However, certain assets relating to these plans qualify as plan assets and are therefore
not eliminated.
The Group recognises the contribution payable to a defined contribution plan in exchange for the
services of the employees rendered during the period as an expense.
Healthcare benefits
Some Group companies provide healthcare benefits to their retirees. The entitlement to these benefits
is usually based on the employee remaining in service up to the retirement age and the completion of
a minimum service period. The expected costs of these benefits are accounted for in the same manner
as for defined benefit plans.
Share-based payments
The Group operates equity-settled, share-based compensation plans. The fair value of the employee
services received in exchange for the grant of the shares is recognised in income with a correspond ing
increase in equity. As the fair value of the services received cannot reliably be measured, the value is
measured by reference to the fair value of the equity instruments granted and the price the employees
are required to pay.
2.21 Provisions and contingent liabilities
Provisions are liabilities with uncertainties as to the amount or timing of payments. Provisions are
recognised if there is a present obligation that probably requires an outflow of resources and a reliable
estimate can be made at the balance sheet date and be measured on a best estimate basis. Contingent
liabilities are disclosed in the Notes if there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources or the amount of the obligation cannot be
measured with sufficient reliability.
2.22 Treasury shares
Treasury shares are presented in the consolidated balance sheet as a deduction from equity and are
recorded at cost. The difference between the purchase price and the sales proceeds is included in share
premium.
2.23 Earnings per share
Basic earnings per share are calculated by dividing net income available to shareholders by the
weighted average number of shares in issue during the reporting period, excluding the average number
of shares purchased by the Group and held as treasury shares.
For diluted earnings per share the profit and the weighted average number of shares in issue are
adjusted to assume conversion of all dilutive potential shares, such as convertible debt and share
options issued. Potential or contingent share issuance is treated as dilutive when conversion to shares
would decrease earnings per share.
2.24 Offsetting
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when
there is a legally enforceable right to set off the recognised amounts and there is an intention to settle
on a net basis, or to realise the asset and settle the liability simultaneously.
Swiss Life – Annual Report 2012