Hydro Annual Report 2011b

F14
FINANCIAL STATEMENTS
Note 1 - Significant accounting policies and reporting entity
Contributions to defined contribution plans are recognized in the income statement in the period in which they accrue. Multiemployer
defined benefit plans where available information is insufficient to use defined benefit accounting are accounted for
as if the plan were a defined contribution plan.
Segment information
Hydro identifies its reportable segments and discloses segment information under IFRS 8 Operating Segments.
Note 2 - Changes in accounting principles and new pronouncements
Changes in accounting principles
Hydro has elected to change the accounting policy for valuation of its embedded derivatives as of January 1, 2011. All
embedded derivatives are now calculated on the basis of committed volumes for liability positions rather than estimated
volumes. To reflect this change, financial liabilities were decreased by NOK 271 million, deferred tax was increased by NOK
74 million, resulting in a net increase of equity as of January 1, 2011 by NOK 197 million. The change is reflected in the
restated balance sheet for 2010. The income statement effects for 2010 would have been immaterial, therefore the income
statement for 2010 and balance sheet for 2009 has not been restated.
Hydro implemented the following new guidance as of January 1, 2011 with no material impact.
IAS 24 (revised 2009) Related Party Disclosure
Amendments resulting from May 2010 Annual Improvements to IFRSs
New pronouncements
As of the date of authorization of these financial statements, the following standards, amendments and interpretations have
been issued by the IASB. These standards or amendments have not yet been adopted by Hydro and are relevant related to
Hydro's future financial reporting. The effective date is applicable to annual accounting periods beginning on or after that date,
unless stated otherwise. None of the new relevant standards will be implemented in 2012.
IFRS 9 Financial Instruments - Classification and Measurement; effective date January 1, 2015.
IFRS 10 Consolidated Financial Statements; effective date January 1, 2013.
IFRS 11 Joint Arrangements; effective date January 1, 2013.
IFRS 12 Disclosures of Interests with Other Entities; effective date January 1, 2013.
IFRS 13 Fair Value Measurement; effective date January 1, 2013.
IAS 19 Employee Benefits (as revised in 2011); effective date January 1, 2013.
IAS 27 Separate Financial statements (as revised in 2011); effective date January 1, 2013.
IAS 28 Investments in Associates and Joint Ventures (as revised in 2011); effective date January 1, 2013.
IFRIC 20 Stripping Cost in the Production Phase of a Surface Mine; effective date January 1, 2013.
As of the date of issue of Hydro's financial statements, all of the implemented standards, amendments to standards and
interpretations were endorsed by the EU. The new pronouncements to be implemented in 2013 or later were not endorsed by
the EU as of the date of issue of Hydro's financial statements.
Hydro is currently evaluating the potential accounting impact of IFRS 9, IFRS 10, IFRS 11, IFRS 12, IFRS 13, IAS 19R, IAS
27R 2011 and IAS 28R. We expect that IFRS 11 Joint Arrangement may impact how Hydro accounts for and discloses certain
of our operations conducted in co-operation with others. Further, we expect that IAS 19R Employee Benefits will impact how
post employment benefits including pensions and measurement changes in the measurement related to such arrangements are
reflected in our financial statements.