ANNUAL REPORT 2011 - Kuehne + Nagel

64
Consolidated Financial Statements 2011 _ _ _ _ _ _ Accounting Policies
Subsidiaries
Subsidiaries are companies controlled, directly or indirectly, by
the Group, where control is defined as the power to govern
financial and operating policies of a company so as to obtain
benefits from its activities. This control is normally evidenced
when the Group owns, either directly or indirectly, more than
50 per cent of the voting rights whereby potential voting rights
of a company are also considered. Subsidiaries are included in
the Consolidated Financial Statements by the full consolidation
method as from the date on which control is transferred to the
Group until the date control ceases. The non-controlling interests
in equity as well as earnings for the period are reported separately
in the Consolidated Financial Statements.
Associates and joint ventures
Investments in associates and joint ventures are accounted for
by the equity method. Associates are companies over which the
Group exercises significant influence but which it does not control.
Significant influence is normally evidenced when the Group
owns 20 per cent or more of the voting rights. Potential voting
rights of a company are also considered. Joint ventures are entities
that are subject to contractually established joint control.
The Group’s share of income and expenses of associates and
joint ventures is included in the income statement from the date
significant influence or joint control commences until the date
significant influence or joint control ceases.
Income statement and cash flow statement (average rates for the year)
2011 Variance 2010
CHF per cent CHF
EUR 1.– 1.2350 –10.9 1.3864
USD 1.– 0.8908 –14.6 1.0430
GBP 1.– 1.4226 –11.7 1.6119
Balance sheet (year-end rates)
Transactions eliminated on consolidation
Intra-group balances, transactions, income and expenses are
eliminated in preparing the Consolidated Financial Statements.
Foreign exchange translation
Year-end financial statements of consolidated companies are prepared
in their respective functional currencies and translated
into CHF (the Group’s presentation currency) as of year-end.
Assets and liabilities, including goodwill and fair value adjustments
arising on consolidation, are translated at year-end
exchange rates and all items included in the income statement
are translated at average exchange rates for the year, which
approximate actual rates. Exchange differences originating from
such translation methods have no impact on the income statement
since they are recognised in other comprehensive income.
Transactions in foreign currencies in individual subsidiaries are
translated into the functional currency at actual rates of the
transaction day. Monetary assets and liabilities are translated at
year-end rates. Non-monetary assets and liabilities that are
stated at historical cost are translated at actual rates of the
transaction day. Non-monetary assets and liabilities that are
stated at fair value, are translated at the rate at the date the
values are determined. Exchange differences arising on the
translation are included in the income statement.
The major foreign currency conversion rates applied are as follows:
2011 Variance 2010
CHF per cent CHF
EUR 1.– 1.2222 –2.8 1.2578
USD 1.– 0.9353 –1.9 0.9532
GBP 1.– 1.4632 –0.5 1.4712