Panalpina Annual Report 2011

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Consolidated Financial Statements 2011
IFRS 13 “Fair value measurement”
The aim of the standard is to improve consistency and to reduce complexity by providing a precise definition of fair value and a single
source of fair value measurement and disclosure requirements across all IFRS standards. The requirements, which are largely aligned
between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where
its use is already required or permitted by other standards within IFRS or US GAAP. The Group is yet to assess IFRS 13’s full impact
and to adopt IFRS 13 no later than the accounting period beginning on or after January 1, 2013.
Amendments to IAS 1 “Presentation of Financial Statements”
In June 2011 the IASB issued Presentation of items of Other Comprehensive Income (amendments to IAS 1) “Presentation of Financial
Statements” with an effective date of July 1, 2012. The Group is yet to assess the amendments impact.
Amendments to IAS 12 “Deferred Tax – Recovery of Underlying Assets”
In December 2010 the IASB issued Deferred Tax: “Recovery of Underlying Assets” - Amendments to IAS 12. The Amendment offers
a partial clarification of the treatment of timing differences arising in connection with the application of the fair-value model of IAS 40.
In the case of real estate held for investment purposes, it is often difficult to assess whether existing differences will reverse through
continued use or as a result of a sale. The amendment to IAS 12 provides that reversal in principle occurs as a result of a sale. As a
consequence of the amendment, SIC 21 “Income Taxes – Recovery of Revalued Depreciable Assets” shall no longer be effective for
real estate held for investment purposes measured at fair value. The Group anticipates no impact on its financial statements in applying
this amendment, which will become effective for accounting periods on or after January 1, 2012.
IAS 19 “Employee benefits”
The standard was amended in June 2011. As the Group already eliminated the corridor approach and recognized all actuarial gains and
losses in Other Comprehensive Income (OCI) as they occurred and already recognized all past service costs the impact on Group l
evel will only be the replacement of interest costs, and the expected return on plan assets with a net interest amount that is calculated
by applying the discount rate to the net defined benefit liability (asset). In addition the amendments require additional disclosures.
The Group is yet to assess the full impact of the amendments. The amendments are mandatory for periods beginning on or after
January 1, 2012.
IAS 27 “Consolidated and Separate Financial Statements”
IAS 27 will be renamed from “Consolidated and Separate Financial Statements” to “Separate Financial Statements” and henceforth
shall apply only to entities preparing stand-alone financial statements in accordance with IFRS. The new standard has no impact on the
Group as it does not prepare stand-alone financial statements in accordance with IFRS.
IAS 28 “Investments in Associates”
In the amendments to IAS 28, the content of the provisions governing the accounting for shares in associates and joint ventures is
expanded. The Group is yet to assess full impact of this amendment and intends to adopt the amendment no later than the accounting
period beginning January 1, 2013.
Amendments to IAS 32 “Financial Instruments: Presentation” and IFRS 7 “Financial Instruments: Disclosures – Offsetting of
Financial Assets and Financial Liabilities”
The preconditions set out in IAS 32 regarding the set-off are set out in additional application guidelines. The Amendments to IFRS 7
concern new disclosure requirements in connection with certain netting agreements. The Group is yet to assess full impact of these
amendments and intends to adopt the amendments no later than the accounting period beginning January 1, 2014.
There are no other IFRS or IFRIC interpretations that are not yet effective and would be expected to have a material impact on the Group.
Basis of consolidation
Consolidation policy
The subsidiaries are those companies controlled directly or indirectly, by Panalpina World Transport (Holding) Ltd., where control is defined
as the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. This control is
normally evidenced when the Group owns, either directly or indirectly, more than one half of the voting rights or currently exercisable
potential voting rights of a company’s share capital. Inter-company balances, transactions and resulting unrealized income are eliminated
in full. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has already been
obtained and if they do not result in a loss of control.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition
of a subsidiary is determined by the fair values of the assets transferred, the liabilities incurred to previous owners and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed in a
business combination are measured initially at their fair value at acquisition date. On an acquisition by acquisition basis, the Group recognizes
any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s
net assets. Investments are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from
contingent consideration amendments. Cost also includes direct attributable costs of investment.
Panalpina Annual Report 2011