Annual Report 2010 - Frauenthal Holding AG

Consolidated Financial Statements Frauenthal Holding Group 2010
new structure is to make the standard clearer and easier to apply. Early application is permitted. As the Frauenthal Group
already reports in accordance with IFRS, the revised version of IFRS 1 is not applicable.
IFRS 3 Business Combinations (revised in 2008) and amendments to IAS 27 Consolidated and Separate
Financial Statements
The revision of IFRS 3 was carried out in conjunction with an amendment to IAS 27, as part of the second phase of the
Business Combinations project. The revision of IFRS 3 and amendments to IAS 27 were published on 10 January 2008 and
adopted by the EU on 3 June 2009. They are applicable to annual periods beginning on or after 1 July 2009. The changes
to the standards extend the scope of application to business combinations between entities or businesses under common
control and combinations in which no consideration is transferred. Combinations between entities or businesses under
common control are excepted. The costs to issue debt or equity securities in connection with an acquisition must be recognised
in accordance with IAS 32 and IAS 39. All other acquisition related costs must be recognised as expense. In addition,
the option of applying the full goodwill method is introduced. This means that an acquirer may recognise the full goodwill
of an acquiree and not merely its own interest, which increases the reported value of non-controlling interests in acquired,
remeasured net assets. In the case of a staged acquisition, goodwill determination and remeasurement of the net assets only
take place at the time of the change of control. All the subsequent transactions between the parent and the non-controlling
interests are treated exclusively as equity transactions.
Amendments to IFRS 2: Group Cash-settled Share-based Payment Transactions
The amendment to IFRS 2 clarifying the treatment of cash-settled share-based payment transactions published on 18 June
2009 applies to annual periods beginning on or after 1 January 2010. Retrospective application is required and early application
is permitted. EU adoption took place on 23 March 2010. The reason for the amendment was the need to clarify how a
subsidiary of a group should account for certain share based payment transactions in its own statements in situations where
the entity receives goods or services from employees or suppliers but the parent or another group company must pay the
latter. The amendment specifies that a company that receives goods or services under a share-based payment agreement
must account for them irrespective of which group entity is responsible for settling the obligation, or whether settlement is
to be in equity or in cash. In particular, the amendment makes it clear that the term “group” in IFRS 2 is synonymous with
that in IAS 27 Consolidated and Separate Financial Statements (the parent and all its subsidiaries). IFRIC 8 and 11 were
withdrawn as the interpretations were incorporated in the amendment to IFRS 2. The amendments to IFRS 2 are not relevant
to the Frauenthal Group.
Amendments to IFRS 1: Additional Exemptions for First-time Adopters
These amendments to IFRS 1 were published on 23 July 2009, and apply retrospectively to certain situations. They were
adopted by the EU on 23 June 2009, and apply to annual periods beginning on or after 1 January 2010. Their purpose is
to ensure that the transition process does not subject companies accounting in accordance with IFRS for the first time to
unnecessary costs or workload.
• Entities applying the full cost method are exempted from the retrospective application of IFRS to oil and gas assets; and
• Entities are exempted from reassessing the determination as to whether existing arrangements contain leases, as required
by IFRIC 4, if application of the previous GAAP would have led to the same determination.
The exposure draft of these amendments also proposed an exemption for entities with operations subject to rate regulation.
However these proposals were ultimately included in a separate project on rate regulated activities. As the Frauenthal Group
already reports in accordance with IFRS the amendments are not relevant to it.
Improvements to IFRS made by the 2007–2009 annual improvements projects
On 16 April 2009 the IASB published amendments to ten standards and two IFRIC interpretations drawn up in the course
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