IMMOEAST Annual Report 2006/07

118 IMMOEAST Annual Report 2006/07
IFRS 7.43
IFRS 7.1
IFRS 8.1
IFRS 3.4
IFRS 3.3
IFRS 3.1 in
connection
with IFRS
3.14 & 3.16
1.4 Early application of accounting standards
IFRS 7 Financial Instruments: Disclosures
IFRS 7 Financial Instruments: Disclosures was announced by the IASB on 18 August 2005 and adopted without
change into European law by the EU Commission on 11 January 2006 through regulation (EG) Nr. 108/2006 of the
Commission of the European Union. The Basis for Conclusions and Guidance on Implementing do not form an integral
component of IFRS 7 and were not adopted into European law at the EU level in connection with the endorsement
process.
IFRS 7 applies to annual periods beginning on or after 1 January 2007. However, earlier application is encouraged.
This new standard is designed to provide disclosures in financial statements that enable users to evaluate the significance
of financial instruments for the company’s financial position and performance as well as the nature and
extent of risks arising from financial instruments to which the entity is exposed during the period and at the reporting
date, and how management manages these risks. The provisions of IFRS 7 complement the principles for recognising,
measuring and presenting financial assets and liabilities in IAS 32 Financial Instruments: Presentation and IAS 39
Financial Instruments: Recognition and Measurement. IFRS 7 must be applied to all recognised and non-recognised
financial instruments, with the exception of those items listed under IFRS 7.3.
IFRS 8 Operating Segments
The IASB issued IFRS 8 Operating Segments, which is part of a joint project with the US Financial Accounting Standards
Board (FASB) to reduce the differences between IFRS and US-GAAP. IFRS 8 will replace IAS 14 and achieve
convergence with the requirements of SFAS 131. IFRS 8 requires companies to provide financial and descriptive
information on their reportable segments. This standard calls for the identification of operating segments based on
the internal management focus of the company (management approach). In keeping with this approach, the presentation
of the segments must reflect the same basis used for internal reporting. IFRS 8 applies to annual periods beginning
on or after 1 January 2009. The early application of IFRS 8 to these consolidated financial statements would lead,
above all, to additional disclosures in the notes and provide more detailed insight into the financial position and
performance of the individual segments.
IFRS 8 had not yet been adopted into the body of European Union law at the time these consolidated financial statements
were prepared. Reservations were expressed by the European Financial Reporting Advisory Group (EFRAG) in
connection with the reporting of internal financial information that is not based on IFRS data. Since all data published
as part of segment reporting are based solely on IFRS and the definition of the segments meets the requirements of
IAS 14, IMMOEAST assumes these notes converge with the requirements of both IFRS 8 and IAS 14.
2. Basis of Consolidation
2.1 Consolidation methods
A business combination is the bringing together of separate entities or businesses into one reporting entity. IFRS 3
applies to all business combinations, with the exception of companies under common control and business combinations
involving mutual entities as well as business combinations based on contracts that do not include the exchange
of ownership interests or which results in the formation of joint ventures.
All business combinations that fall under the scope of application defined by IFRS 3 must be recorded using the
purchase method of accounting. The application of the purchase method includes the identification of the acquirer,