Half-yearly financial Report at June 30, 2013 - A2A

Half-yearly financial report at June 30, 2013Changes in accounting standards56of a three-stage process whose scope is to fully replace IAS 39 “Financial Instruments:Recognition and Measurement” and introduces new criteria for classifying and measuringfinancial assets and liabilities. The main changes introduced by IFRS 9 may be summarizedas follows: financial assets are classified into two categories alone - “at fair value” or “atamortized cost”. As a result, the categories “loans and receivables”, “available-for-salefinancial assets” and “held-to-maturity investments” disappear. Classification within thetwo categories is carried out on the basis of an entity’s business model and the contractualcash flow characteristics of the financial asset. A financial asset is measured at amortizedcost if both of the following requirements are met: the objective of the entity’s businessmodel is to hold assets to collect contractual cash flows (and therefore in substance not toearn trading profits) and the characteristics of the cash flows of the asset are solelypayments of principal and interest. A financial asset is measured at fair value if it is notmeasured at amortized cost. The rules for accounting for embedded derivatives havebeen simplified: separate accounting for the embedded derivative and the financial asset“hosting” it is no longer required.All equity instruments - listed or unlisted - must be measured at fair value. IAS 39established on the other hand that unlisted equity instruments should be valued at cost iffair value could not be reliably measured.An entity has the option of presenting changes in the fair value of equity instruments thatare not held for trading in equity; that option is not permitted for equity instruments thatare held for trading. This designation is permitted on initial recognition, may be adoptedfor each individual instrument and is irrevocable. If an election is made for this option,changes in the fair value of these instruments may never be reclassified from equity toprofit or loss. Dividends on the other hand continue to be recognized in profit or loss.IFRS 9 does not permit reclassifications between the two categories of financial assetexcept in the rare case of a change in an entity’s business model. In this case the effects ofthe reclassification are applied prospectively.The disclosures required to be made in the notes have been adjusted to the classificationand measurements rules introduced by IFRS 9;• IAS 36 “Impairment of Assets”: the amendments to IAS 36, which are applicable fromJanuary 1, 2014, were issued on May 29, 2013 and regard the disclosures required onrecognizing impairment losses when the recoverable amount of impaired assets is basedon fair value less costs of disposal. The amendments remove the requirement to disclosethe recoverable amount of assets when the cash generating unit (CGU) includes goodwillor intangible assets with indefinite useful lives but the asset is not impaired. In addition,disclosures are required of the recoverable amount of an asset or CGU and the way inwhich fair value less costs of disposal has been calculated when an impairment loss hasbeen recognized for the asset;