Annual report 2005 - Sava dd

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• Amendment to IAS 39 Financial Instruments:
Recognition and Measurements – The Fair Value
Option (effective from 1 January 2006) – The
amendment restricts the designation of financial
instruments as »at fair value through profit or loss«.
The Sava Group does not have any financial
instruments that would be classified as financial
instruments at fair value.
• Amendment to IAS 39 Financial Instruments:
Recognition and measurement and IFRS 4 Insurance
Contracts – Financial Guarantee Contracts (effective
from 1 January 2006): The amendment requires
guarantees that are not insurance contracts to be
measured at fair value upon initial recognition. The
company considers insurances and guarantees hired by
companies in the Group as insurance contracts and
accounts for them as contingent liabilities. Guarantees
for loans are issued by the parent company for loans
hired by subsidiaries. Therefore from the aspect of the
Sava Group there are no contingent liabilities, since all
liabilities of subsidiaries are presented in the
consolidated financial statements.
• Amendment to IAS 21 The Effects of Changes in
Foreign Exchange Rates – Net Investment in a Foreign
Operation (effective from 1 January 2006) – The
Group currently has no items comprising net
investments in foreign operations that will be affected
by the amendment.
• IFRIC 4 Determining whether an Arrangement
contains a Lease (effective from 1 January 2006) –
The interpretation requires certain arrangements to be
accounted for as a lease in accordance with IAS 17
Leases even if they are not in legal form of a lease. The
Group has no such agreements made that would
require dealing with according to this interpretation.
• IFRIC 5 Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation
Funds (effective from 1 January 2006) - The
interpretation deals with funds created for the purpose of
settling decommissioning and similar expenses. IFRIC 5
is not relevant to the Group's operations.
• IFRIC 6 Liabilities arising from Participating in a
Specific Market – Waste Electrical and Electronic
Equipment (effective from 1 December 2005) – The
interpretation deals with obligations arising from the
European Union Directive regulating the collection,
treatment, recovery and environmentally sound
disposal of waste equipment. IFRIC 6 is not relevant
to the Group's operations.
• IFRIC 7 Applying the Restatement Approach under
IAS 29 Financial Reporting in Hyperinflationary
Economies (effective from 1 March 2006) – The
interpretation contains guidance on how an entity
would restate its financial statements pursuant to IAS
29 in the first year it identifies the existence of
hyperinflation in the economy of its functional
currency. IFRIC 7 is not relevant to the Group's
operations, since they do not operate in hyperinflation.
• IFRIC 8 Scope of IFRS 2 (effective from 1 May 2006)
– The interpretation clarifies that the accounting
standard IFRS 2 Shareholders Payment applies to
arrangements where an entity makes share-based
payments for apparently nil or inadequate
consideration. IFRIC 8 is not relevant to the Group's
operations, since there are no such payments.
• IFRIC 9 Reassessment of Embedded Derivatives
(effective from 1 June 2006) – The interpretation
clarifies that the treatment of an embedded derivative
is assessed by the entity when the entity first becomes
a party to the contract, and that reassessement is
prohibited unless there is a change in the terms of the
contract that significantly modifies the cash flows that
otherwise would be required under the contract. IFRIC
9 is not relevant to the Group's operations since it does
not have any embedded derivatives.
* Explanation to the applied abbreviations:
IAS – International Accounting Standard
IFRS – International Financial Reporting Standards
IFRIC - International Financial Reporting
Interpretations Committee