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

Pensions
The Group’s pension plans include defined benefit plans
and defined contribution plans.
The Group has an obligation to pay a specific benefit to
defined benefit plans at the time of retirement. A pension
asset or pension obligation corresponding to the present
value of the obligations less the defined pension plans’
assets at fair value is recognised for these benefit plans.
The obligations are determined annually by independent
actuaries using the 'Projected Unit Credit Method' assuming
that each year of service gives rise to an additional unit of
benefit entitlement, and each unit is measured separately
to build up the final obligations. Estimation of future
obligations is based on the Group’s projected future
developments in mortality, early retirement, future wages,
salaries and benefit levels, interest rate, etc. The defined
pension plans’ assets are estimated at fair value at the
balance sheet date.
Differences between the projected and realised
developments in pension assets and pension obligations
are referred to as actuarial gains and losses and are
recognised in Other comprehensive income when gains and
losses occur.
Pension assets are recognised to the extent they represent
future repayments from the pension plan.
In case of changes in benefits relating to employees’
previous service period, a change in the estimated present
value of the pension obligations will occur, which will be
recognised immediately if the employees have acquired a
final right to the changed benefits. If not, the change is
recognised over the period in which the employees become
entitled to the changed benefit.
Net periodic pension income/(cost) from defined benefit
plans consists of the items: service cost, interest cost and
expected return on assets. Service cost is recognised in
wages, salaries and pension costs. Interest cost and
expected return on assets, net, are recognised in pension
income.
For the defined contribution plans, the Group will pay in a
fixed periodic contribution to separate legal entities and will
have no further obligations after the payment has been
made.
TDC Group Annual Report 2011
Financial liabilities
Interest-bearing loans are recognised initially at the
proceeds received net of transaction expenses incurred. In
subsequent periods, loans are measured at amortised cost
so that the difference between the proceeds and the
nominal value is recognised in the Income Statements over
the term of the loan.
Other financial liabilities are measured at amortised cost.
Deferred income
Deferred income recognised as liabilities comprises
payments received covering income in subsequent years
measured at cost.
Leases
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from the
lessor) are charged to the income statement on a straightline
basis over the term of the lease.
Leases of property, plant and equipment, where the Group
has substantially all the risks and rewards of ownership, are
classified as finance leases. The cost of finance leases is
measured at the lower of the assets’ fair value and the
present value of future minimum lease payments. The
corresponding rental obligations are included in loans. Each
lease payment is allocated between the liability and finance
charges so as to achieve a constant interest rate on the
finance balance outstanding. Property, plant and equipment
acquired under finance leases are depreciated over the
shorter of the useful lives of the assets and the lease term.
Assets held for sale
Assets held for sale comprise non-current assets and
disposal groups. Disposal groups are groups of assets to
be disposed of, by sale or otherwise, together as a group in
a single transaction. Liabilities associated with assets held
for sale are liabilities directly associated with those assets
that will be transferred in the transaction. Assets are
classified as assets held for sale when their carrying
amount will be recovered principally through a sales
transaction rather than through continuing use and it
seems highly probable that the disposal will be effected
within twelve months in accordance with a single
coordinated plan.
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