IMMOEAST Annual Report 2006/07

120 IMMOEAST Annual Report 2006/07
IAS 27.28
IAS 27.33
IFRS 3.62 (a)
IAS 27.24
IAS 28.20 in
connection
with 28.25
IAS 31.1
IAS 31.3
IAS 31.9
IAS 31.10
IAS 31.30 /
IAS 31.38
statements – whenever possible – as of the balance sheet date used by the parent company. In no case may the
balance sheet dates of the parent company and subsidiary differ by more than three months, and adjustments must
be made for any significant business transactions concluded during this period. In order to develop the consolidated
financial statements, all necessary financial information from the subsidiaries must be prepared in accordance with
IFRS. Therefore, uniform Group accounting and valuation methods must be applied to similar business events and
transactions.
Minority interests must be reported under equity on the consolidated balance sheet, but shown separately from
the equity of the parent company. The share of consolidated profit due to minority interests must also be shown
separately.
Newly acquired companies are included in the consolidation as of their acquisition date. The conversion of the opening
balance sheets of major newly acquired companies to IFRS is subject to an audit or review.
Joint ventures are included at their proportionate share according to the same general principles described above.
All receivables and liabilities, revenues, other income and expenses from the provision of goods and services between
fully or proportionately consolidated companies are eliminated. Interim profits, which arise primarily from the transfer
of stakes in other companies and properties between member companies of the group, are eliminated.
For associated companies consolidated at equity, the difference resulting from the elimination of the investment and
equity is determined according to the same general principles used for fully consolidated companies. The carrying
values of assets and liabilities as well as the amount of revenues and expenses were determined in accordance with
IAS 28.20 on a uniform basis as required by IFRS. For associated companies with a different balance sheet date,
interim financial statements were prepared at a balance sheet date within three months from the balance sheet date
used by IMMOEAST in accordance with IAS 28.25. Major transactions were reflected in a proportional adjustment of
results included in the consolidated financial statements (also see point 4.4).
2.2 Consolidation range
IFRS follow a multi-level approach in the classification of the consolidation range. The assignment to a specific level
is based on the Group’s influence on the company: the stronger the influence of the Group, the more extensive the
inclusion in the consolidated financial statements.
An overview of the IMMOEAST Group companies is presented at the end of the notes.
2.2.1 Proportionate consolidation
IAS 31 is applied to the recognition and measurement of all stakes in joint ventures and reporting on the assets,
liabilities, income and expenses of joint ventures. A joint venture is a contractual agreement whereby two or more
parties undertake an economic activity that is subject to contractually agreed joint control. The partner companies
are the shareholders of a joint venture and participate in the joint management of the entity. The form of the contractual
agreement is determined by the relevant legal regulations.
IAS 31 allows for the use of the equity method or proportionate consolidation in preparing the consolidated financial
statements. The selected method must then be applied throughout the Group. IMMOEAST considers the depiction of
joint ventures through proportionate consolidation to be the more appropriate form of presentation because it makes
the asset, financial and earnings position more easily understandable for the users of the financial statements.