Annual Report 2010 (PDF, 5.2MB) - Panalpina Annual Report 2012

Consolidated and Annual Financial Statements 2010
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IFRIC 14 (amended) “The Limit on a Defined Benefit Asset, Minimum Funding Requirement and Their Interaction – Prepayment of
a Minimum Funding Requirement”
The amendment corrects an unintended consequence of IFRIC 14, “IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and Their Interaction”. Without the amendment, entities are not permitted to recognize some voluntary prepayments
for minimum funding contributions as an asset. With this amendment this has been revoked and should be applied retrospec -
tively to the earliest comparative period presented. The Group will apply the amendment for the financial reporting period commencing
on 1 January 2011. The impact on the consolidated financial statements of the Group has not yet been analyzed in detail but it is not
expected to be material, if any.
Improvement to IFRSs
In May 2010, the IASB issued amendments to its standards, primarily with a view to remove inconsistencies and clarifying the wording.
The transitional provisions for each standard are different. The Group has not yet analyzed in detail the changes to the accounting
policies and the impact on the financial position or performance.
Basis of consolidation
Consolidation policy
The subsidiaries are those companies controlled directly or indirectly, by Panalpina World Transport (Holding) Ltd., where control is defined
as the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. This control is
normally evidenced when the Group owns, either directly or indirectly, more than one half of the voting rights or currently exercisable
potential voting rights of a company’s share capital. Inter-company balances, transactions and resulting unrealized income are eliminated
in full. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has already been
obtained and if they do not result in a loss of control.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition
of a subsidiary is determined by the fair values of the assets transferred, the liabilities incurred to previous owners and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed in a
business combination are measured initially at their fair value at acquisition date. On an acquisition by acquisition basis, the Group recognizes
any non-controlling interest in the acquiree either at fair value or at the non-controlling interest in the acquiree either at fair value or at
the non-controlling interest’s proportionate share of the acquiree’s net assets. Investments are accounted for at cost less impairment. Cost
is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable
costs of investment.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value
of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded
as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of bargain purchase, the difference is
recognized directly in the statement of comprehensive income.
The Group treats transactions with non-controlling interests as transactions with equity owner of the Group. For purchases from noncontrolling
interest, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
When the Group ceases to have significant influence, any retained interest in the entity is remeasured to its fair value, with the change in
carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for the
retained interest as an associate, joint venture or financial asset. Any amounts previously recognized in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed the related assets or liabilities. The amounts previously recognized
in other comprehensive income are reclassified to profit or loss.
Associates are all entities over which the Group has significant influence, but where it does not have control, generally accompanying a
shareholding of business between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method
of accounting and are initially recognized at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of
any accumulated impairment losses.
The Group’s share of its associates’ post-acquisition profits or losses is recognized in the income statement, and its share of post-acquisition
movements is recognized in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the Group does not recognize further losses unless it has incurred obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates.
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Dilution
gains and losses arising in investments in associates are recognized in the income statement.
Operating segment information
The determination of the Group’s operating segments is based on the organization units for which information is reported to the Group’s
management. The Group is primarily organized by regions and has four reportable segments, “Europe / Africa / Middle East / CIS”, “North
America”, “Central and South America” and “Asia / Pacific.” Each reportable segment offers the same products and services. The Executive
Board reviews monthly the Group’s internal reporting in order to assess performance and allocate resources. Performance is measured
Panalpina Annual Report 2010