ONE ROOF

value initially recognized in equity is reclassified to income as
soon as the hedged item is recognized in income.
In isolated instances, derivative financial instruments are not
designated as hedges. In such cases, changes in fair value
are recognized in income or expense.
Contingencies, commitments and other obligations are
possible or current obligations, based on past transactions,
that are unlikely to lead to an outflow of resources. They are
disclosed separately and are not included in the Balance Sheet
unless assumed in the course of a business combination. The
amounts stated for contingent liabilities reflect the extent of
the liabilities as of the reporting date.
Judgments made by management in applying the
accounting policies primarily relate to the following issues:
• Securities may be grouped in different categories.
• Actuarial gains and losses can be accounted for in various
ways when determining provisions for pensions and similar
obligations.
• Assets earmarked for sale must be assessed to confirm that
they are available for immediate sale and their sale is highly
probable. If the result of this assessment is positive, they
and any liabilities to be disposed of in the same transaction
must be reported and accounted for as assets or liabilities
held for sale.
The decision made by the HOCHTIEF Group in each instance
is set out under Accounting Policies in these Notes.
Preparation of the IFRS Consolidated Financial Statements re-
quires Group management to make estimates and assump-
tions that affect the reported amount of assets, liabilities,
income and expenses, and disclosures of contingencies,
commitments and other obligations. The main estimates and
assumptions relate to the following:
• Assessing projects on a percentage of completion basis, in
particular with regard to accounting for change orders, the
timing of profit recognition and the amount of profit recognized.
• Estimating the economic life of property, plant and equipment
and of investment properties.
• Accounting for provisions.
• Testing goodwill and other assets for impairment.
• Testing deferred tax assets for impairment.
❘ Information for our Shareholders ❘ ❘ Management Report ❘ ❘ Financial Statements and Notes ❘
All estimates and assumptions are based on current circumstances
and appraisals. Forward-looking estimates and assumptions
made as of the balance sheet date with a view to
future business performance take account of circumstances
prevailing on preparation of the Consolidated Financial Statements
and future trends considered realistic for the global and
industry environment. Actual amounts can vary from the estimated
amounts due to changes in the operating environment
that are at variance with the assumptions and lie beyond management
control. If such changes occur, the assumptions and
if necessary the carrying amounts of affected assets and liabilities
are revised accordingly.
New accounting pronouncements
Adoption by the International Accounting Standards Board
(IASB) and International Financial Reporting Interpretations
Committee (IFRIC) of new and revised IFRS and IFRIC pronouncements
has resulted in changes to accounting policies
in those instances where the pronouncements have
been adopted by the EU and have been applied in the reporting
period January 1 to December 31, 2009 either because
their application is mandatory for that period or because
HOCHTIEF elected early application.
Changes in IFRS and IFRIC affecting the HOCHTIEF Group
are as follows:
Amendment to IAS 1 Presentation of Financial
Statements:
The amendment to IAS 1 provides that all non-owner changes
in equity either have to be presented in one statement of comprehensive
income or in two separate statements. In addition,
all changes with an effect on income of components previously
recognized directly in equity must be shown separately. More
over, an opening balance sheet must be prepared for the prior
year in certain cases. The amendments to IAS 1 are applicable
for the first time for fiscal years beginning on or after January
1, 2009. As a result of the amendment, a Statement of Comprehensive
Income is added and the Notes to the Consolidated
Financial Statements are supplemented with a table showing
changes in other comprehensive income including reclassifications
to the Consolidated Statement of Earnings. A second
table discloses the tax effects relating to each change in other
comprehensive income.
Annual Report 2009 141