2.2.1 Accounting Standards Implemented in 2013
In recent years, the IASB has published various amendments to IFRSs and new IFRSs as well as interpretations of the International Financial Reporting Interpretations Committee (IFRICs).
The IASB also published amendments to existing standards as part of an annual procedure (Annual Improvements Project). The primary aim of the collective standard is to eliminate inconsistencies and to clarify formulations.
In May 2012, various standards were amended, "Improvements to IFRSs 2009 – 2011 Cycle" (January 1, 2013), in the context of the Annual Improvements Project (AIP). These relate to IAS 1, IAS 16, IAS 32, IAS 34, and IFRS 1. The amended standards have no relevance for the accounting and valuation in the consolidated financial statements of GRENKELEASING AG.
The new and revised IFRSs listed below entered into force for the past fiscal year:
IAS 1 "Presentation of Financial Statements" (July 1, 2012)
IAS 19R "Employee Benefits" (January 1, 2013)
IFRS 7 "Disclosures: Offsetting Financial Assets and Financial Liabilities" (January 1, 2013)
IFRS 13 "Fair Value Measurement" (January 1, 2013)
IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" (January 1, 2013)In June 2011, the IASB published amendments to IAS 1 "Presentation of Financial Statements" (July 1, 2012). The presen- tation of other comprehensive income was changed to that effect that the items of other comprehensive income are pre- sented dependent upon the possibility of whether or not they may be reclassified to profit and loss. GRENKELEASING AG has applied these amendments prematurely as per December 31, 2012.
In June 2011, the IASB published amendments to IAS 19 "Employee Benefits" (revised in 2011, IAS 19R) that resulted in the abolition of the corridor method. In the future, actuarial gains and losses must be directly recognised in equity and not affect profit and loss. In addition, income from the expected interest on plan assets may only be recognised in the amount of the discount rate used to calculate the defined benefit obligation. The amendments to IAS 19R must be applied retro- actively to financial statements in fiscal years beginning on or after January 1, 2013.
The abolition of the corridor method has no effect on the consolidated financial statements of GRENKELEASING AG since it was not applied to the GRENKE Consolidated Group and actuarial gains and losses have already been recognised in
other comprehensive income. The adoption of a uniform net interest component of interest from plan assets and the inter- est expense of plan obligations has a moderate impact on the consolidated financial statements of GRENKELEASING AG as plan assets only exist for defined benefit obligations in Switzerland. Furthermore, disclosure requirements have increased. The amendments to requirements for termination benefits have no impact on GRENKELEASING AG's consoli- dated financial statements.
The amendments to IFRS 7 were published in December 2011 and must be adopted for the first time in fiscal years beginning on or after January 1, 2013. The changes define additional quantitative disclosure requirements regarding the gross amounts of financial assets and liabilities which were offset. This amendment had no impact on the consolidated financial statements.
In May 2011, the IASB published IFRS 13 "Fair Value Measurement" which compiles the regulations of fair value measurement previously found in individual IFRSs and replaces them with a uniform regulation. IFRS 13 applies for the first time to fiscal years beginning on or after January 1, 2013. Therefore, the Consolidated Group has revised its valuation principles for measurement at fair value. GRENEKELEASING AG has a manageable derivative business ("plain vanilla"). The derivatives are measured at fair value. The measurement includes additional input parameters, such as the counter- party risk and own credit risk. The changes to the measurement of derivatives had an insignificant effect on the consoli- dated financial statements. Moreover, the reporting was supplemented by additional disclosures as required by IFRS 13 and is explained in the respective chapters on financial instruments.
The amended pronouncements of IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" have no effect on the consolidated financial statements of GRENKELEASING AG.
On May 29, 2013, the IASB published amendments to IAS 36 "Impairment of Assets". The amendments must be adopted for the first time in fiscal years beginning on or after January 1, 2014. Early adoption is permitted. The European Union has adopted the amendments to IAS 36 into EU law in the Official Gazette on December 20, 2013. GRENKELEASING AG has applied these amendments prematurely as per December 31, 2013. With the amendments to IAS 36, the IASB has limited the scope of disclosure requirements introduced by IFRS 13 regarding the recoverable amount. At the same time, the scope of disclosure requirements in the notes has been expanded in the case of impairment or a reversal of impairment. According to the current amendment to IAS 36, in the future, the recoverable amount must only be disclosed if impairment or a reversal of impairment has occurred in the current period. This amendment clarifies the disclosure requirements regarding the recoverable amount. The corresponding disclosures are presented in note 4.9.
2.2.2 Accounting Standards and Interpretations Already Published but not yet Implemented
Apart from the IFRSs mentioned whose application is mandatory, or where early adoption is permitted, the IASB has also published other amended IASs and IFRSs, which have already received partial endorsement into European law by the EU but which will only become mandatory at a later date. Voluntary early application of these standards is explicitly permitted and/or recommended. GRENKELEASING AG is not exercising this option. These standards will be implemented in the consolidated financial statements when their adoption becomes mandatory.
In December 2013, various standards were amended ("Improvements to IFRSs 2010 – 2012 Cycle", July 1, 2014), in the context of the Annual Improvements Project (AIP). Early adoption of any individual amendments within the cycle is per- mitted. This relates to IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, and IAS 38. The amended standards clarify existing issues. The amended standards have no relevance for the accounting and valuation in the consolidated financial
statements of GRENKELEASING AG since the issue either do not apply to the GRENKE Consolidated Group or have already been interpreted accordingly.
In December 2013, various standards were amended, "Improvements to IFRSs 2011 – 2013 Cycle" (July 1, 2014), in the context of the Annual Improvements Project (AIP). Early adoption of any individual amendments within the cycle is per- mitted. This relates to IFRS 1, IFRS 3, IFRS 13, and IAS 40. The amended standards have no relevance for the accounting and valuation used in the consolidated financial statements of GRENKELEASING AG.
The IASB also amended or released the following standards and interpretations:
IAS 27 "Separate Financial Statements" (January 1, 2014)
IAS 28 "Investments in Associates" (January 1, 2014)
IAS 32 "Financial Instruments: Presentation" (January 1, 2014)
IAS 39 "Financial Instruments: Recognition and Measurement" (January 1, 2014)
IFRS 9 "Financial Instruments" (January 1, 2017)
IFRS 10 "Consolidated Financial Statements" (January 1, 2014)
IFRS 11 "Joint Arrangements" (January 1, 2014)
IFRS 12 "Disclosure of Interests in Other Entities" (January 1, 2014)In May 2011, the IASB released three new standards regulating the recognition of the investments of a reporting entity in its consolidated financial statements. IFRS 10 "Consolidated Financial Statements" introduces a uniform consolidation model for all companies on the basis of control and replaces the regulations of IAS 27 "Consolidated and Separate Financial Statements" and SIC-12 "Consolidation – Special Purpose Entities". IFRS 11 "Joint Arrangements" covers the recognition of joint arrangements. These occur when two or more parties have joint control. In the EU, the new standards must be applied retroactively to financial statements in fiscal years beginning on or after January 1, 2014. Early adoption is permitted. GRENKELEASING AG has examined the effects of this adoption on the consolidated financial statements. In particular, the existing ABCP programmes as well as franchise relationships have been observed. GRENKELEASING AG still does not expect the amendment to have a significant impact on the recognition and measurement in the Consolidated Group. ABCP programmes with special purpose entities which have not yet been consolidated were presented so that the transferred financial assets and the corresponding liabilities were not shown as a disposal since a continuing involvement in the transferred assets remained. GRENKELEASING AG does not expect a change in the scope of consolidation. IFRS 11 has no effect on the consolidated financial statements of GRENKELEASING AG as no companies of the GRENKE Consolidated Group have investments in joint arrangements.
IFRS 12 "Disclosure of Interests in Other Entities" expands the disclosure requirements for investments in other com- panies. This involves the compilation of disclosures from several standards that have already been published in IFRS 12. In the EU, IFRS 12 must be applied prospectively to financial statements in fiscal years beginning on or after January 1, 2014. Early adoption is permitted. The disclosure requirements were expanded significantly. Following the amendment, the amended IAS 27 "Separate Financial Statements" now only includes regulations for separate financial statements and is therefore not relevant to the consolidated financial statements.
In October 2012, the IASB published amendments to the transitional provisions of the amended IFRS 10, 11, and 12. Exceptions and simplifications were published regarding restated comparative figures, as well as disclosure requirements of comparative information regarding non-consolidated structured entities for the first-time adoption of IFRS 12. In the EU,
the adoption of these amendments will also be mandatory as per January 1, 2014. The amendments will not have an effect on the consolidated financial statements.
With the amendment of the above standards, the IASB also amended IAS 28 "Investments in Associates". This standard is not relevant to the GRENKE Consolidated Group since it holds no investments in associates.
In November 2009, the IASB published IFRS 9 "Financial Instruments", which only relates to financial assets as part of a project to revise accounting for financial instruments. In October 2010, it added regulations for financial liabilities, including new regulations in order to include own credit risk when exercising the fair value option. The new standard regulates the "classification and measurement" of financial instruments defined under IAS 39 and is the first phase in the project to revise the accounting of financial instruments in IFRS 9. Financial assets are classified according to two valuation catego- ries: "amortised cost" and "fair value". On November 19, 2013, the IASB published an amendment to IFRS 9 "Hedging Relationships" as part of the project's third phase. This amendment introduced a new general model for the accounting of hedging relationships to the standard. The final version of the second phase of the project "Impairment and Risk Provision" has not yet been disclosed.
The new standard must generally be applied prospectively. However, the regulations regarding the classification into categories must be applied respectively. The convenience of general prospective adoption will result in additional disclosures at the transition date. In July 2013, the IASB decided to postpone the mandatory date of first-time adoption, once again, and to leave the date open until the completion of the limited changes and the completion of the second phase of IFRS 9 regarding "Impairment and Risk Provision". Early adoption continues to be permissible. Endorsement into European law by the EU has been suspended since the European Financial Reporting Advisory Group has postponed the recommendation for the adoption of the currently published IFRS 9 in the EU. As a result of the on-going adjustments to IFRS 9 by the IASB, GRENKELEASING AG has not yet completed its examination as to the impact of IFRS 9 on the consolidated financial statements. Any statement regarding the effects is currently not possible.
The amendments to IAS 32 were published by the IASB in December 2011. The changes must be adopted in fiscal years beginning on or after January 1, 2014. Early adoption is permitted. These changes are intended to clarify existing incon- sistencies via amendments to the application guidelines. However, the existing basic regulations concerning the offsetting of financial instruments remain unchanged. These amendments have no impact on the consolidated financial statements. On June 27, 2013, the IASB published amendments to IAS 39 "Financial Instruments: Recognition and Measurement" with the title "Novation of Derivatives and Continuation of Hedge Accounting". The amendment must be adopted for the first time in fiscal years beginning on or after January 1, 2014. Early adoption is permitted. The changes are intended to clarify situations in which a derivative, which has been designated as a hedging instrument, is novated from one counterpart to a central counterparty as a consequence of laws or regulations. The amendments allow for the continued recognition of the hedging transaction independent of the novation, which would have not been permissible without the amendment. This change has no impact on GRENKELEASING AG. As a result of the settlement of derivative transactions of a Consolidated Group company, which is not defined as a financial counterparty and due to the low level of derivative business involved, these transactions are not subject to the EU regulation of the European Market Infrastructure Regulation (EMIR). Thus, these derivatives are not required to be settled via a central counterparty.