8. LECTURA FINAL: APROXIMACIÓN INTERPRETATIVA
8.10 LA EUTANASIA: UNA OPCIÓN CONTROVERTIDA
1 Basis of preparation
(Continued)1.2 Standards, amendments and interpretations that are not yet effective and have not been early adopted by the Group in 2013
Effective for annual periods beginning on or after
IAS 32 Amendments Financial Instruments: Presentation — Offsetting Financial Assets and Financial Liabilities
1 January 2014
IAS 36 Amendments Impairment of Assets —
Recoverable Amount Disclosures for Non-Financial Assets
1 January 2014
IAS 39 Amendments Financial Instruments: Recognition and Measurement — Novation of Derivatives and Continuation of Hedge Accounting
1 January 2014
IFRS 9, IFRS 9 Amendments, IAS 39 Amendments and IFRS 7 Amendment
Financial Instruments and Financial Instruments: Disclosures
Non-mandatory
IFRS 10, IFRS 12 and IAS 27 (Revised) Amendments
Investment Entities 1 January 2014
Annual Improvements to IFRSs 2010-2012 cycle and 2011-2013 cycle (issued in December 2013)
1 July 2014
IAS 32 Amendments provides additional application guidance to clarify some of the requirements for offsetting fi nancial assets and fi nancial liabilities on the statement of fi nancial position. IFRS 7 Amendment — Financial Instruments: Disclosure is also amended to require disclosures to include information that will enable users of an entity’s fi nancial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised fi nancial assets and recognised fi nancial liabilities, and master netting agreements, etc. on the entity’s fi nancial position.
IAS 36 Amendments restrict the requirement to disclose the recoverable amount of an asset or cash-generating unit (“CGU”) to periods in which an impairment loss has been recognised or reversed. In addition, the amendments require two additional disclosures when an impairment is recognised or reversed and recoverable amount is based on fair value less costs of disposal: (i) the level of the IFRS 13 “fair value hierarchy” within which the fair value measurement of the asset or cash-generating unit has been determined; (ii) for fair value measurements at Level 2 and Level 3 of the fair value hierarchy, a description of the valuation techniques used and any changes in that valuation technique, key assumptions used in the measurement of fair value, including the discount rates used in the current measurement and previous measurement if fair value less costs of disposal is measured using a present value technique.
II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(Continued)1 Basis of preparation
(Continued)1.2 Standards, amendments and interpretations that are not yet effective and have not been early adopted by the Group in 2013 (Continued)
IAS 39 Amendments provide an exception to the requirement to discontinue hedge accounting in certain circumstances in which there is a change in counterparty to a hedging instrument in order to achieve clearing for that instrument. The amendment covers novations: (i) that arise as a consequence of laws or regulations, or the introduction of laws or regulations; (ii) where the parties to the hedging instrument agree that one or more clearing counterparties replace the original counterparty to become the new counterparty to each of the parties; (iii) that did not result in changes to the terms of the original derivative other than changes directly attributable to the change in counterparty to achieve clearing.
IFRS 9 and IFRS 9 Amendments replace those parts of IAS 39 relating to the classifi cation, measurement and de-recognition of fi nancial assets and liabilities with key changes mainly related to the classifi cation and measurement of fi nancial assets and certain types of fi nancial liabilities. In November 2013, the International Accounting Standards Board issued a revised version of IFRS 9, which introduce a revised hedge accounting model, allow early adoption of the requirement to present fair value changes due to own credit on liabilities designated as at fair value through profi t or loss to be presented in other comprehensive income, and remove the 1 January 2015 mandatory effective date of IFRS 9. Together with the further amendments to IFRS 9, IAS 39 and IFRS 7 are also amended to require additional disclosures.
IFRS 10, IFRS 12 and IAS 27 Amendments apply to a particular class of business that qualifi es as investment entities. Investment entity refers to an entity whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. An investment entity must also evaluate the performance of its investments on a fair value basis. The amendments provide an exception to the consolidation requirements in IFRS 10 and require investment entities to measure particular subsidiaries at fair value through profi t or loss, rather than consolidate them. The amendments also set out disclosure requirements for investment entities.
The Group is in the process of assessing the impact of these new standards and amendments on the consolidated and separate fi nancial statements of the Group and the Bank respectively.
In addition, Annual Improvements to IFRSs 2010–2012 cycle and 2011–2013 cycle were issued in December 2013. The annual improvements process was established to make non-urgent but necessary amendments to IFRSs. The amendments are effective from annual period beginning on or after 1 July 2014. No amendment was early adopted by the Group and no material changes to accounting policies were made in 2013.
II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(Continued)2 Consolidation
2.1 Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. That is the Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The existence and effect of potential voting rights that are currently exercisable or convertible and rights arising from other contractual arrangements are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifi able net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. If there is any indication that goodwill is impaired, recoverable amount is estimated and the difference between carrying amount and recoverable amount is recognised as an impairment charge. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
All intra-group assets and liabilities, equity, income, expenses and cash fl ows relating to transactions between members of the Group are eliminated in full on consolidation. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group.
In the Bank’s statement of fi nancial position, investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to refl ect changes in consideration arising from contingent consideration amendments, but does not include acquisition-related costs, which are expensed as incurred. The results of subsidiaries are accounted for by the Bank on the basis of dividend received and receivable. The Group assesses at each fi nancial reporting date whether there is objective evidence that investment in subsidiaries is impaired. An impairment loss is recognised for the amount by which the investment in subsidiaries’ carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the investment in subsidiaries’ fair value less costs to sell and value in use.