English - Siegfried

Restated Recognized Income and Expense 2005In CHF million Group as IAS 19 (revised) Group (restated)published in 2005Net income recognized directly in equity 12.6 7.2 19.8Net income recognized in income statement 36.5 – 36.5Total recognized net income 49.1 7.2 56.3plant and equipment of CHF 1.1 million respectively, and ina reduction of Other operating income and of the depreciationcharge of CHF 0.3 million in 2005. The change in accountingfor actuarial gains/losses had no effect on personnelexpenses in 2005.Future changes in IFRS Siegfried is currently assessingthe potential impact of the new and revised standards thatwill be effective from January 1, 2007. Siegfried does notexpect that the new and revised standards and interpre -tations will have a significant effect on Siegfried’s resultsand financial position, although they will expand financialstatement disclosure in certain areas, notably IFRS 7, FinancialInstruments: Disclosures, which Siegfried will implementin 2007. Siegfried is also in the process of evaluatingIFRS 8, Operating Segments, which will be effective fromJanuary1, 2009.Method and scope of consolidation The ConsolidatedFinancial Statements include the annual accounts of allSwiss and foreign companies in which Siegfried HoldingAG has a direct or indirect interest of more than 50%.Assets and liabilities, income and expenses are includedaccording to the full consolidation method. Minority interestsin the net assets and income of consolidated com -panies are recorded separately in the consolidated BalanceSheet and in the consolidated Income Statement. Investmentsin associated companies are accounted for by theequity method. These are companies over which the Groupexercises significant influence, but which it does not control.This is normally the case with a voting rights share of20–50%.Group companies acquired or divested in the course of theyear under review are included in or excluded from theconsolidated accounts as of the date at which they werepurchased or sold.The individual financial statements on which the consoli -dated Financial Statements are based are drawn up inaccordance with accounting principles applied uniformlythroughout the Group. All internal Group accountsreceivables and payables, expenses and income and intercompanyprofits are eliminated in the consolidation. Theannual reporting period for all Group companies ends onDecember 31.Business combinations The acquisition of subsidiaries isreported according to the purchase method. The purchasecosts of an acquisition include the sum of the fair marketvalue of the acquired assets, current and contingent liabilities,and issued equity instruments on the acquisition date,including the directly attributable transactions costs of theacquisition. Goodwill is the excess of the acquisition costover the fair value of the identified net assets of the acquiredcompany. If the fair value of the net assets exceeds theacquisition costs, this surplus is credited to net profit.Segment reporting A reporting segment consists of agroup of assets or operating activities that producesproducts and services, with a risk and opportunity profilethat diverges from the rest of the company. A geographicsegment produces products and services for a particulareconomic environment that differs in its risks and opportunitiesfrom other environments.Foreign currency translations The positions of theBalance Sheets are valued on a functional currency basis.The Consolidated Financial Statements are denominatedin Swiss Francs. The functional currency of the Groupcompanies is the respective local currency. Balance sheetsstated in foreign currencies are translated at the year-endexchange rates, the corresponding income statement atthe sales-weighted average annual exchange rates, whichdo not differ significantly from the exchange rates pre -vailing on the transaction dates. The exchange rate differencesarising from the translation of the Financial Statementsare offset directly against equity. Exchange ratedifferences arising on intercompany loans that, in substance,form part of the net investment in that subsidiary,as well as financial liabilities that are designated as hedgesof these investments, are offset against equity. Inter -company loans are regarded as part of a net investmentin a subsidiary, if the settlement of these loans is neitherplanned nor likely to occur in the foreseeable future.Other exchange rate differences are included in theIncome Statement.Financial Statements Siegfried Group65