TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Note 1 Significant Accounting Policies
TDC’s Consolidated Financial Statements for 2011 have
been prepared in accordance with the International
Financial Reporting Standards (IFRS) as adopted by the
European Union and the additional disclosure requirements
issued by the IFRS Executive Order issued by the Danish
Commerce and Companies Agency in pursuance of the
Danish Financial Statements Act. For TDC there are no
differences between IFRS as adopted by the European
Union and IFRS as issued by IASB.
The Consolidated Financial Statements are based on the
historical cost convention, except that the following assets
and liabilities are measured at fair value: derivatives,
financial instruments held for trading, and financial
instruments classified as available for sale and except that
assets held for sale are measured at the lower of carrying
amount at the time of the classification as held for sale and
the fair value less costs to sell.
When preparing the Consolidated Financial Statements,
Management makes assumptions that affect the reported
amount of assets and liabilities at the balance sheet date,
and the reported revenue and expenses for the accounting
period. The accounting estimates and judgements
considered material to the preparation of the Consolidated
Financial Statements appear from note 2 below.
The accounting policies are unchanged from last year.
Consolidation policies
The Consolidated Financial Statements include the Financial
Statements of the Parent Company and subsidiaries in
which TDC A/S has direct or indirect control. Joint ventures
in which the Group has joint control are recognised using
the equity method. Associates in which the Group has
significant influence are recognised using the equity
method.
The Consolidated Financial Statements have been prepared
on the basis of the Financial Statements of TDC A/S and its
consolidated enterprises, which have been restated to
Group accounting policies combining items of a uniform
nature.
On consolidation, intra-group income and expenses,
shareholdings, dividends, internal balances and realised
and unrealised profits and losses on transactions between
the consolidated enterprises have been eliminated.
TDC Group Annual Report 2011
Acquisition of enterprises
On acquisition of subsidiaries, joint ventures and
associates, the purchase method is applied, and acquired
assets, liabilities and contingent liabilities are measured on
initial recognition at fair values on the date of acquisition.
Identifiable intangible assets are recognised if they can be
separated and the fair value can be reliably measured.
Deferred tax of the revaluation made is recognised.
Any positive differences between cost and fair value of the
assets, liabilities and contingent liabilities acquired on
acquisition of subsidiaries are recognised as goodwill in the
Balance Sheets under Intangible assets. The cost is stated
at the fair value of submitted shares, debt instruments as
well as cash and cash equivalents. Goodwill is not
amortised, but is tested annually for impairment. Negative
balances (negative goodwill) are recognised in the Income
Statements on the date of acquisition. Positive differences
on acquisition of joint ventures and associates are
recognised in the Balance Sheets under Investments in joint
ventures and associates.
For acquisitions prior to 1 January 2010, the cost of the
acquisition includes transaction costs. For acquisitions on
or after 1 January 2010, such costs are expensed as
incurred.
If the initial accounting for a business combination can be
determined only provisionally by the end of the period in
which the combination is effected, adjustments made within
twelve months of the acquisition date to the provisional fair
value of acquired assets, liabilities and contingent liabilities
or cost of the acquisition are adjusted to the initial goodwill.
The adjustment is calculated as if it were recognised at the
acquisition date and comparative figures are restated.
Changes in estimates of the cost of the acquisition being
contingent on future events are recognised in the Income
Statement except changes in estimates regarding
acquisitions prior to 1 January 2010, which are adjusted in
goodwill.
For business combinations achieved in stages, the
previously held equity interest in the acquiree is
remeasured at its fair value when control is achieved and
the resulting gain or loss is recognised in profit or loss.
The difference between the cost of acquired minority
interests and the carrying amount of the acquired minority
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