Annual Report & Accounts 2009 - Anglo Irish Bank

Notes to the financial statements continued
1. General information and accounting policies continued
1.33 Significant accounting estimates and judgements continued
Taxation
The taxation charge accounts for amounts due to fiscal authorities in the various jurisdictions in which the Group operates and includes
estimates based on a judgement of future profits and the application of law and practice in certain cases in order to determine the
quantification of any liabilities arising. In arriving at such estimates, management assesses the relative merits and risks of tax treatments
assumed, taking into account statutory, judicial and regulatory guidance and, where appropriate, external advice. Where the final tax
outcome is different from the amounts that are currently recorded, such differences will impact upon the current and deferred tax
amounts in the period in which such determination is made.
Retirement benefits
The Group operates defined benefit pension schemes. The Group’s two schemes have been closed to new members since January 1994.
In determining the actual pension cost, the values of the assets and liabilities of the schemes are calculated. The assets of the schemes
are valued at fair value. The liabilities of the schemes are measured on an actuarial basis, using the projected unit method and
discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. This involves
modelling the future growth of scheme liabilities and requires management to make assumptions as to price inflation, dividend growth,
salary and pensions increases, return on investments and employee mortality. There are acceptable ranges in which these estimates can
reasonably fall. The impact on the Consolidated income statement and the Consolidated statement of financial position could be
materially different if an alternative set of assumptions was used.
1.34 Prospective accounting changes
Details of amendments to standards and interpretations adopted during the period are set out in note 1.3. The Group has not applied
the following new standards, amendments to standards and interpretations that have been approved by the International Accounting
Standards Board and which would be applicable to the Group with an effective date after the date of these financial statements.
The following will be applied in 2010:
� Amendments to IFRS 2 - Share-based Payment;
� IFRS 3 Revised - Business Combinations;
� Amendments to IFRS 5 - Non-Current Assets Held for Sale and Discontinued Operations;
� Amendment to IFRS 7 - Financial Instruments: Disclosures;
� IFRS 8 - Operating Segments;
� Further amendments to IAS 1 - Presentation of Financial Statements;
� Amendment to IAS 7 - Statement of Cash Flows;
� Amendment to IAS 16 - Property, Plant and Equipment;
� Amendment to IAS 17 - Leases;
� Amendment to IAS 19 - Employee Benefits;
� Amendment to IAS 20 - Government Grants and Disclosure of Government Assistance;
� Amendments to IAS 23 - Borrowing Costs;
� Amendments to IAS 27 - Consolidated and Separate Financial Statements;
� Amendments to IAS 28 - Investments in Associates;
� Amendments to IAS 31 - Interest in Joint Ventures;
� Amendments to IAS 36 - Impairment of Assets;
� Amendments to IAS 38 - Intangible Assets;
� Amendments to IAS 39 - Financial Instruments: Recognition and Measurement – Eligible Hedged Items;
� Amendment to IAS 40 - Investment Property; and
� IFRIC Interpretation 17 - Distributions of Non-cash Assets to Owners.
The following will be applied in 2011:
� Amendment to IAS 24 - Related Party Disclosures;
� Amendments to IAS 32 - Financial Instruments: Presentation;
� Amendment to IFRIC Interpretation 14 - IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction; and
� IFRIC Interpretation 19 - Extinguishing Financial Liabilities with Equity Instruments.
The following will be applied in 2013:
� IFRS 9 - Financial Instruments: Classification and Measurement.
These will be adopted in future years and, with the exception of IFRS 9 and the amendments to IFRS 7 and IAS 24, are not expected to
have a material impact on the Bank's results or financial statements.
IFRS 9 will ultimately replace IAS 39 - Financial Instruments: Recognition and Measurement. Its aim is to reduce the complexity of
accounting for financial assets and in so doing to aid investors’ and other users’ understanding of financial information. IFRS 9 uses a
single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in
IAS 39. It also requires a single impairment method to be used which replaces the various methods currently prescribed in IAS 39.
The amendment to IFRS 7 requires the use of a three-level fair value hierarchy to provide additional disclosures about the relative
reliability of measurement bases used to calculate financial instrument fair values. In addition, the amendment requires enhanced
disclosures in respect of liquidity risk.
The amendment to IAS 24 simplifies the disclosure requirements for Government-related entities and clarifies the definition of a related
party.
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