Hornbach-Baumarkt-AG Group

94 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Explanatory notes on the principles and methods applied in the consolidated financial statements
items directly and in full under other comprehensive income. Moreover, retrospective service cost must
now be recognized directly through profit or loss in the year in which it arises. Furthermore, the expected
income from plan assets is currently determined at the beginning of the accounting period on the basis of
the management's subjective expectations concerning the development in the value of the investment
portfolio. Upon application of IAS 19 (revised 2011), it will only be permitted at the beginning of the respective
period to recognize a typical return on plan assets at the level of the current discount rate for
pension obligations.
As the HORNBACH-Baumarkt-AG Group already bases its accounting on the method due to be applicable
in future, first-time application of this standard is not expected to have any implications.
The amended definition of termination benefits will impact on the recognition of top-up payments committed
in the context of part-time early retirement agreements. Previously, these top-up payments were
classified as termination benefits and accordingly recognized at their full amounts as provisions upon the
signing of part-time early retirement agreements. Due to the amended definition of termination benefits,
upon application of IAS 19 (revised 2011) these top-up payments will no longer meet the requirements for
recognition as termination benefits. They will rather basically involve other long-term employee benefits
accumulated in installments over the employee’s respective period of service.
As a result of the amended definition of termination benefits, the top-up payments committed in the context
of part-time early retirement agreements now constitute other long-term employee benefits. Firsttime
application of the amended standard will not have any material implications for the presentation of
the net asset, financial and earnings position of the HORNBACH-Baumarkt-AG Group as, with only a few
exceptions, the employees due to benefit from part-time early retirement arrangements have already
reached the passive stage of such arrangements.
This amendment requires first-time application in financial years beginning on or after January 1, 2013.
• Amendments to IAS 27 “Separate Financial Statements”: Upon the adoption of IFRS 10 "Consolidated
Financial Statements", the requirements governing the principle of control and preparation of consolidated
financial statements will be transferred out of IAS 27 and definitively treated in IFRS 10 (please see
comments on IFRS 10). As a result, IAS 27 will in future only include those requirements governing the accounting
treatment of subsidiaries, joint ventures and associates in IFRS separate financial statements.
The amendment requires first time application in financial years beginning on or after January 1, 2014.
The amendments to IAS 27 will not have any implications for the net asset, financial and earnings position
of the HORNBACH-Baumarkt-AG Group.
• Amendments to IAS 28 "Investments in Associates and Joint Ventures": The adoption of IFRS 11 "Joint
Arrangements" also resulted in adjustments being made to IAS 28. As previously, IAS 28 governs application
of the equity method. However, its scope of application will be significantly extended due to the adoption
of IFRS 11. In future, not only investments in associates, but also investments in joint ventures will have to
be measured using the equity method (please see IFRS 11). Application of proportionate consolidation for
joint ventures will thus become obsolete. In future, potential voting rights and other derivative financial
instruments will also have to be accounted when assessing whether a company has significant influence
and/or when determining the share held by an investor in the company’s assets.