Hornbach-Baumarkt-AG Group

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Explanatory notes on the principles and methods applied in the consolidated financial statements 95
A further amendment relates to recognition pursuant to IFRS 5 in cases where only part of the investment
in an associate or a joint venture is intended for sale. IFRS 5 should then be partially applied when only
one share or part of an investment held in an associate (or in a joint venture) meets the “held for sale”
criterion. The amendment requires first time application in financial years beginning on or after January 1,
2014. First-time application of the amended standard is not expected to have any implications for the future
consolidated financial statements of HORNBACH-Baumarkt-AG.
• Amendments to IAS 32 and IFRS 7 "Offsetting Financial Assets and Financial Liabilities": This supplement
to IAS 32 clarifies the requirements in place for offsetting financial instruments. The supplement explains
the significance of the current legal right to set-off and clarifies which methods involving gross settlement
may be deemed to constitute net settlement pursuant to the standard. These clarifications are also
accompanied by extended note disclosure requirements in IFRS 7. The amendment to IAS 32 requires firsttime
application in financial years beginning on or after January 1, 2014. The amendment to IFRS 7 requires
first-time application in financial years beginning on or after January 1, 2013. First-time application
of the amended standard is not expected to have any implications for the future consolidated financial
statements of HORNBACH-Baumarkt-AG.
• IFRS 10 "Consolidated Financial Statements": In this standard, the concept of control is provided with a
new, comprehensive definition. If one company controls another company, then the parent company must
consolidate the subsidiary. Under the new concept, control exists when voting or other rights mean that
the potential parent company can exercise power over the potential subsidiary, when it participates in positive
or negative variable returns from the potential subsidiary, and when it can influence these returns
on account of its power over the potential subsidiary. This new standard might have implications for the
scope of consolidation, such as for special purpose entities. Where differing qualifications in terms of
subsidiary status are ascertained under IAS 27/SIC-12 and IFRS 10, retrospective application must be
made of IFRS 10. Early application is only permitted if undertaken in parallel with the application of
IFRS 11 and IFRS 12, as well as with the amendments to IAS 27 and IAS 28 introduced in 2011. The new
standard requires first-time application in financial years beginning on or after January 1, 2014. Firsttime
application of the amended standard is not expected to have any implications for the future consolidated
financial statements of HORNBACH-Baumarkt-AG.
• IFRS 11 "Joint Arrangements": This standard provides new requirements for the accounting treatment of
joint arrangements. The decisive criterion under the new concept is whether the entity constitutes a joint
operation or a joint venture. A joint operation exists when the parties exercising joint control have direct
rights over the assets and obligations for the liabilities. The individual rights and obligations are recognized
on a prorated basis in the consolidated financial statements. In a joint venture, by contrast, the
parties exercising joint control have rights over the net asset surplus. This right is presented in the consolidated
financial statements by application of the equity method. The option of proportionate consolidation
in the consolidated financial statements is thus obsolete. The new standard requires first-time application
in financial years beginning on or after January 1, 2014. Specific transitional requirements have
been laid down for the transition, e.g. from proportionate consolidation to the equity method. Earlier application
is only permitted in parallel with IFRS 10 and IFRS 12, as well as with the amendments to IAS 27
and IAS 28 introduced in 2011. First-time application of the amended standard will not have any implications
for the future consolidated financial statements of HORNBACH-Baumarkt-AG.
• IFRS 12 "Disclosure of Interests in Other Entities": This standard governs the disclosure obligations for
interests held in other entities. The disclosures required are considerably more extensive than those re-