Panalpina Annual Report 2011

Cash and cash equivalents and other current financial assets
Consolidated Financial Statements 2011
Cash and cash equivalents included in the statement of financial position and statement of cash flows represent cash on hand, bank
and postal checks, bills of exchange net, current balance with banks and similar institutions less bank overdraft as well as time deposits
and highly liquid money market papers with a maturity period of less than three months from the date of acquisition. Such balances are
only reported as cash if they are readily convertible to known amounts of cash and are subject to insignificant risk of change in value.
Other current financial assets include time deposits and highly liquid money market papers with a maturity period between three months
and one year.
Non-current assets held for sale
Non-current assets or disposal groups are classified as assets held for sale when their carrying amount is to be recovered principally through
a sales transaction and a sale is considered highly probable. Before classification as held for sale, the assets or components of a disposal
group are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets or disposal groups are
measured at the lower of their carrying amount and fair value less costs. Any impairment loss on a disposal group is allocated first to
goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to financial assets, deferred tax
assets and employee benefit assets, which continue to be measured. Impairment losses on initial classification as held for sale and
subsequent gains or losses on remeasurement are recognized in the income statement. Gains are not recognized in excess of any cumulative
impairment loss.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are recognized in equity
as a deduction, net of tax effects, from the proceeds.
Treasury shares
When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs,
is net of any tax effects and is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are
presented as a deduction from total equity. Where such shares are subsequently reissued, any consideration received, net of any directly
attributable incremental transaction costs and the related income tax effects, the resulting surplus or deficit on the transaction is transferred
to retained earnings.
Retained earnings and other reserves
Retained earnings and other reserves contain legal reserves which are not distributable to the shareholders pursuant to Swiss law, cumulative
translation adjustments of all foreign currency differences arising from the translation of the financial statements of foreign operations
as well as cumulative actuarial gains and losses from defined benefit post-employment plans net of taxes and accumulated difference in
available-for-sales assets.
Financial liabilities
Financial liabilities are either classified as financial liabilities at fair value through profit or loss, financial liabilities at amortized cost or as
derivatives designated as hedging instruments in an effective hedge as appropriate. The Group determines the classification of its financial
liabilities at initial recognition. Financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings and derivative
financial instruments.
Subsequent measurement
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss. This category includes derivative financial instruments entered into by the Group that
do not meet the hedge accounting criteria. Gains or losses on liabilities at fair value through profit or loss are recognized in the income statement.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost. Any discount between the
net proceeds received and the principal value due on redemption is amortized over the duration of the debt instruments and is recognized
as part of financing costs using the effective interest rate method.
Derecognition of financial liabilities
Financial liabilities are derecognized when the obligation under the liability is discharged or cancelled or expired. Where a financial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a derecognition of the original liability. The recognition of a new liability and the difference in
the respective carrying amounts is recognized in the income statement.
Panalpina Annual Report 2011
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