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Consolidated explanatory notes

These consolidated half-year financial statements as at 30 June 2013 were prepared pursuant to Regulation (EC) No. 1606/2002 of 19 July 2002, in observance of International Accounting Standards IAS/IFRSs (hereinafter IFRSs) endorsed by the European Commission, supplemented by the relevant interpretations of the International Financial Reporting Interpretations Committee – IFRIC (IFRS IC) formely called Standing Interpretations Committee (SIC) as well as the provisions enacted in implementing article 9 of Italian Legislative Decree no. 38/2005.

The figures in these consolidated condensed six-monthly financial statements are comparable with the same balances of the previous financial year, unless indicated otherwise in the notes commenting on the individual items

The statement of financial position as of 31 December 2012 and the income statement for the first six months of 2012 were recast as illustrated in the section “Summary of adjustments” in these notes.  

A comparison of single items in both the income statement and the statement of financial position must also take into consideration the changes to the scope of consolidation indicated in the specific section.

Financial Statements

The formats used are the same as those used for the consolidated financial statements as of and for the year ended 31 December 2012. Specifically, a vertical format has been used for the income statement, with individual items analysed by type. We believe that this type of presentation, which is also used by our major competitors and is in line with international practice, best represents company results. It is worthy of note that, for comparative purposes and for a more accurate disclosure, a new item has been added –“Other non-operating revenues” – to reflect the effects of bargain purchases made during the year. To this end, reference is made to note 14 in the income statement.

The statement of financial position makes the distinction between current and non-current assets and liabilities.

Non-recurring costs and revenues are indicated separately in the financial statements.

The cash flow statement has been prepared using the indirect method, as allowed by IAS 7.

The statement of comprehensive income is presented in a separate document from the income statement, as permitted by IAS 1 Revised, distinguishing between items that can be reclassified to the income statement and those that cannot.  The statement of changes in equity has been prepared as required by IAS 1 revised.

Moreover, with reference to  Consob resolution no. 15519 of 27 July 2006 on financial statements, specific supplementary formats of income statement, statement of financial position and cash flow statement have been included, while highlighting the most significant balances with related parties, in order to avoid altering the overall clarity of the financial statements.

The general principle adopted in preparing these consolidated condensed half-year financial statements is the cost principle, except for financial assets and liabilities (including derivative instruments), which were measured at fair value.

In drawing up the consolidated financial statements, management  was required to use estimates; the major areas characterised by valuations and assumptions of particular significance together with those having notable effects on the situations presented are provided in the paragraph "Significant estimates and valuations".

The consolidated statement of financial position and income statement schedules and the information included in the explanatory notes are expressed in thousands of Euro, unless otherwise indicated.

Significant estimates and valuations

Preparation of the consolidated half-year financial statements and related notes requires the use of estimates and valuations by the directors, with effects on the balance sheet figures, based on historical data and on the forecasts of specific events that are reasonably likely to occur on the basis of currently available information. The main areas characterised by valuations and assumptions, especially the types and assumptions for their processing, together with reference book values, are set forth below.

Provisions for risks

These provisions have been made by adopting the same procedures as previous periods and hence by referring to the updated reports of the legal counsel and the consultants overseeing the disputes, as well as on the basis of developments in the related proceedings. Specifically, in the paragraph relating to provisions for risks the assumptions used to estimate the provision for risks in INPS (Social Security) disputes are specified.

Recognition of revenues

Revenues for the sale of electricity, gas and water are recognised and accounted for on delivery and include the allocation for services rendered between the date of the latest metre reading and the end of the period. This allocation reflects estimates of the customer’s daily consumption, based on the historic profile, adjusted to reflect the weather conditions or other factors which might affect consumption under evaluation.

It should also be noted that these valuation procedures, especially those relating to the more complex valuations, such as the determination of  any impairment losses on non-current assets, are generally only made definitively at the time the annual report is prepared, except when there are indications of impairment requiring an immediate valuation of any losses in value.

Income taxes are recognised on the best estimate of the expected weighted average tax rate for the entire fiscal year.  

Scope of consolidation

These consolidated condensed half-year financial statements as at 30 June 2013 include the financial statements of the Parent Company Hera S.p.A. and those of its subsidiaries. Control is obtained when the Parent Company has the power to determine the financial and operational policies of a company, in such a way as to obtain benefits from the company’s activity.

Small-scale subsidiaries, and those in which the exercise of voting rights are subject to substantial and long-term restrictions, are excluded from line-by-line consolidation and valued at cost.

Significant investments in associated companies are valued with the equity method. Minor investments are instead carried at cost. Subsidiaries and associated companies that are not consolidated, or accounted for with the equity method, are reported in note 20.

Companies held exclusively for future sale are excluded from consolidation and recognised at fair value; if fair value cannot be determined precisely, they are value at cost.  .

Equity investments in joint ventures, in which the Hera Group exercises joint control with other companies, are consolidated with the proportionate method reporting the assets, liabilities, revenues and costs on a line-by-line basis in proportion to the Group's investment.

Changes to the scope of consolidation in the first half of 2013, compared with the consolidated financial statements as at 31 December 2012, are shown below.

Changes in the scope of consolidation

Subsidiaries

Consolidated companiesCompanies no longer consolidated Notes
Acegas-Aps Spa Fully consolidated
AcegasAps Service Srl Fully consolidated
CST Srl Fully consolidated
 Famula on line in liquidatione SpaWound up
Iniziative Ambientali Srl Fully consolidated
Insigna Srl Fully consolidated
Modena Network Spa Fully consolidated
Naonis Energia Srl in liquidazione Fully consolidated
NestAmbiente Srl Fully consolidated
Rila Gas AD Fully consolidated
SiGas d.o.o Fully consolidated
Sinergie Spa Fully consolidated
Società Italiana Lining Srl Fully consolidated
Trieste Onoranze e Trsporti Funebri Srl Fully consolidated
Tri-Generazione Srl Fully consolidated

Associated companies

New companies measured with the equity methodCompanies  no longer measured with the equity methodNotes
 Refri Srlcompany sold
 Modena Network Spafully consolidated
Elettrogorizia Spa accounted for with equity method

Jointly controlled companies

Consolidated companiesCompanies no longer consolidatedNotes
Aristea Scarl proportionate consolidation
Estenergy Spa proportionate consolidation
Est Reti Elettriche Spa proportionate consolidation
Estpiù Spa proportionate consolidation
Isontina Reti Gas Spa proportionate consolidation

The main changes in the scope of consolidation are due to the business combination with the Acegas Aps group, of which more in the report on operations and in the following notes. 

In addition, it is worthy of note that effective 1 January 2013 Hera Spa acquired the assets of Famula On-Line Spa, a company engaged in organization, planning, production sales and consulting  in the areas of information technology, computer services and data processing. On the same date, liquidation proceedings began for Famula On-Line S.p.A. On 13 June 2013 the shareholders approved the company’s liquidation accounts and the relevant distribution; accordingly, this company is no longer consolidated. The company was cancelled from the Companies Registed on 25 June 2013.

On 19 April 2013 Acantho S.p.A. purchased an additional 10% of Modena Network S.p.A. from Sorgea S.r.l., thereby increasing its equity stake to 40%. The company, which was previously recognized with the equity method, is now consolidated on a line-by-line basis, given that the Group exercises control over it, thanks to a 14% investment by Hera S.p.A. and a 28% equity interest held by Aimag S.p.A.  

On 19 June 2013 Herambiente S.p.A.  sold its investment in Refri S.r.L. to Unieco Costruzioni Meccaniche Srl.

A list of the companies included in the scope of consolidation is provided at the end of these not

Changes in the consolidated companies

Effective 1 April 2013 Hera Comm S.R.L. acquired from Lombardi S.R.L. the operation related to the provision of heating services to a number of residential buildings in the area of odena. On the same date, the operation was sold to Hera Energie S.R.L. for Euro 34 thousand, inclusive of goodwill for Euro 174 thousand. 

Accounting policies and consolidation principles

In preparing the consolidated condensed half-year financial statements according to IAS 34 – Interim Financial Reporting, use was made of the same financial reporting standards as those used for the consolidated financial statements as of and for the year ended 31 December 2012, to which reference is made for completeness, except as otherwise noted in the paragraph “Accounting standards, amendments and interpretations applicable from 1 January 2013” and on the basis of the accounting standards applicable following the merger with the Acegas APS Group and illustrated below: 

Investment property

Land and buildings are classified as investment property when these assets generate cash flows independent of the other Company’s activities, as they are held to earn rentals and/or capital appreciation and not to be used in production or in the provision of goods and services or for the management of the company. As permitted by IAS 16, Investment property is recognised at cost, less accumulated depreciation and any impairments.

Foreign currency transactions and consolidation of foreign companies 

Foreign currency transactions are recognised at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominate din foreign currency are translated at the exchange rate prevailing at fiscal year-end. Any exchange rate differences arising from such transactions are recognised as financial income and expense. The assets and liabilities of consolidated foreign companies denominated in a currency other than the euro are translated at the exchange rate prevailing on the dates of the relevant financial statements. Income and expenses are translated at the average exchange rate for the year. Translation differences are combined in a single equity reserve until the company is sold.  

The main exchange rates used to translate into euros the assets and liabilities of consolidated foreign companies denominated in a currency other than the euro were as follows:

 30 June 2013
 AverageSpecific
Bulgarian lev1.95581.9558
Serbian dinar111.902113.939

Subsequent events and outlook

Information on the Group’s activities and significant events occurred after the end of the year are illustrated in the report on operations in paragraph 1.02 “Subsequent events”.

Other information

These consolidated half-year financial statements as at 30 June 2013 were drawn up by the Board of Directors and approved by the same at the meeting held on 28 August 2013.

Summary of the effects of the business combination with the Acegas Group 

On 25 July 2012 Hera S.p.A. and Acegas APS Holding S.R.L., a company with a 62.691% controlling interest in Acegas-APS S.p.A., a listed multi-utility operating in the north-east of Italy, entered into a master agreement to lay down the procedures to complete a business combination between the two Groups.

Under this plan, as of 1 January 2013  Acegas APS Holding S.R.L. merged with and into Hera S.p.A., which in turn obtained the 62.691% equity interest in Acegas APS S.p.A.. On 2 January 2013 Hera S.p.A. launched a mandatory purchase and exchange offer for all the share of Acegas Aps S.p.A.  that it did not own to delist the company. 

On 3 May 2013, the closing date of the offer, Hera S.p.A. became the sole shareholder of Acegas Aps S.p.A., as its equity stake rose from 62.691% to 99.784%, with the remaining 0.216% being represented by treasury shares.

This business combination is treated in accordance with IFRS 3, effective 1 January 2013, the date on which the Hera Group took control of the company. In particular, the assets and liabilities of the Acegas Group recognized at their fair value on that date, and properly aligned with the Hera Group’s accounting standards, are shown below (“Purchase Price Allocation”):

As of the date of these consolidated condensed financial statements, the purchase price allocation was still under way.

The table below shows acquired  assets and liabilities at their carrying amounts and the amount determined according to the Hera Group’s accounting standards. As illustrated below, a comparison between both sets of values shows that the merger gave rise to a temporary badwill of Euro 74,806 thousand.  

 Acquisition AcegasAps Group
 Property,plant and equipment   216,805 
 Intangible assets   636,647 
 Property investments   3,107 
 Non-controlling interests   12,406 
 Financial assets   26,242 
 Deferred tax assets   23,508 
 Inventories  9,449 
 Trade receivables   248,428 
 Contract work in progress   137 
 Financial assets   15,084 
 Current tax assets   4,993 
 Other current assets   35,615 
 Cash and cash equivalents   26,413 
 Borrowings – maturing beyond 12 months   (254,537) 
 Post-employment benefits   (22,784) 
 Provisions for risks and charges   (26,230) 
 Deferrred tax liabilities   (1,684) 
 Finance lease payments - maturing beyond 12 months   (59) 
 Banks and other borrowings – maturing within 12 months   (288,792) 
 Finance lease payments - maturing within 12 months   (15) 
 Trade payables   (184,376) 
 Current tax liabilities   (3,502) 
 Other current liabilities   (113,052) 
 Total net assets acquired   363,803 
  
 Fair Value of ordninary shares issued (*)  279,587 
 Cash outlay(*)   9,425 
 Non-controlling interests   (15) 
 Total merger value   288,997 
  
 Gain on bargain purchase   74,806 

 

(*): Details of price paid for the acquisition of AcegasAps SpA 
  
Merger of AcegasAps Holding S.R.L. with and into Hera S.p.A. 
Fair Value ordinary shares issued 175,928
Cash outlay3,407
  
Purchase and exchange offer - I phase (articles 102 and 106, paragraphs 1 and 2-bis, Consolidated Law on Finance  (TUF) 
Fair Value ordinary shares issued 84,279
Cash outlay4,515
  
Purchase and exchange offer - II phase (article 108, paragraph 2, Consolidated Law on Finance  (TUF)  
Fair Value ordinary shares issued 16,322
Cash outlay1,283
  
Purchase and exchange offer - III phase (articles 111 and 108, paragraph 1, Consolidated Law on Finance  (TUF) 
Fair Value ordinary shares issued 3,058
Cash outlay220
  
Total fair value ordinary shares issued 279,587
Total cash outlay 9,425

Summary of adjustments

Starting 1 January 2013 the Hera group applied IAS 19 Revised, which abolished the so-called “corridor method” to account for actuarial gains and losses. The application of the new standard entailed the recasting of the statement of financial position at 31 December 2012 and the income statement for the six months ended 30 June 12012. In particular, “Post-employment benefits” rose by Euro 21,597 thousand with contra entries of Euro 17,521 thousand in equity and Euro 4,076 thousand in “Deferred tax liabilities”. These effects include the benefit recognised in “Personnel costs” - in the income statement for the six months ended 30 June 2012 – for Euro 613 thousand net of the relevant tax effect, which was recognised under “income tax for the period” for Euro 276 thousand.  

Furthermore, the income statement for the first six months of 2012 was restated to reflect the aborted sale, for reasons beyond the company’s control, of the Berti Pichat area. This sale had involved the recognition of a gain of Euro 6,625 thousand under 2other operating revenue”. Specifically, in the light of such restatement, “Other operating revenue” declined by the same amount net profit for the first half of 2012 fell by Euro 3,479 thousand, net of the tax effect accounted for under “Income tax for the period” for Euro 3,146 thousand. Considering that negotiations are under way with a potential buyer, a portion of the Berti Pichat area continues to be classified as “Non-current assets held for sale” also in the statement of financial position as of 30 June 2013.

The restated income statement for the first half of 2012 and statement of financial position as of 31 December 2012 are shown below.

Restated income statement for the six months ended 30 June 2012

thousands of euro First half 2012
reported
ias 19R plus Berti areaFirst half 2012
adjusted 
 Revenues  2,298,917    2,298,917 
 Other operating revenues   91,070    84,445 
 of which non-recuring   6,625   (6,625)  (0) 
 Use of raw materials and consumables   (1,399,806)   (6,625)  (1,399,806) 
 Service costs   (427,503)    (427,503) 
 Personnel costs   (192,797)  613   (192,184) 
 Amortisation, depreciation and allowances   (151,550)    (151,550) 
 Other operating costs   (19,337)    (19,337) 
 Capitalised costs   13,057    13,057 
 Operating profit   212,051  613  (6,625)  206,039 
 Portion of profits (losses) pertaining to associated companies   2,897    2,897 
 Financial income   45,600    45,600 
 Financial expense   (110,268)    (110,268) 
 Financial income (expense), net   (61,771)  0  0  (61,771) 
 Pre-tax profit   150,280  613  (6,625)  144,268 
 Income taxes for the period   (66,833)  (276)  3,146  (63,963) 
 Net profit for the period   83,447  337  (3,479)  80,305 
 Attributable to:    
 Shareholders of Parent Company   76,943  318  (3,479)  73,782 
 Non-controlling shareholders   6,504  19  0  6,523 
 Earnings per share      
 basic  0.070    0.067 
 diluted  0.066    0.064 

Restated statement of financial position as of 31 December 2012

thousands of euro 31 December 2012 reportedias 19R31 December 2012 adjusted
EQUITY AND LIABILITIES    
Share capital and reserves32   
Share capital 1,115,014 1,115,014
Treasury shares - nominal value  (13,813) (13,813)
Costs for capital increase  0.00 0
Reserves 540,138-16,657523,481
Treasury shares -amount exceeding nominal value (4,181) (4,181)
Reserves for derivative instruments recognised at fair value  (5,993) (5,993)
Retained earnings (accumulated deficit) 2,061 2,061
Profit (loss) for the period 118,658759119,417
Equity pertaining to Parent Company's shareholders 1,751,884-15,8981,735,986
Non-controlling interests 142,978(1,623)141,355
Total equity 1,894,862(17,521)1,877,341
Non-current liabilities    
Borrowings – maturing beyond 12 months332,440,994 2,440,994
Post-employment benefits3491,36621,597112,963
Provisions for risks and charges35251,897 251,897
Deferrred tax liabilities3678,114(4,076)74,038
Finance lease payments - maturing beyond 12 months3713,356 13,356
Financial instruments - derivatives2332,963 32,963
Total non-current liabilities 2,908,69017,5212,926,211
Current liabilities    
Banks and other borrowings – maturing within 12 months33317,560 317,560
Finance lease payments - maturing within 12 months373,767 3,767
Trade payables381,165,838 1,165,838
Current tax liabilities3920,463 20,463
Other current liabilities40350,060 350,060
Financial instruments - derivatives2338,229 38,229
Total current liabilities 1,895,917 1,895,917
Non-current liabilities held for sale 310 0
TOTAL LIABILITIES 4,804,60717,5214,822,128
TOTAL EQUITY AND LIABILITIES 6,699,46906,699,469

Accounting standards, amendments and interpretations applied as of 1 January 2013

The amendments to IFRSs issued by the IASB and endorsed by the European Union apply as of 1 January 2013.

Amendment to IFRS 1 – First-time adoption of International Financial Reporting Standards (Regulation 1255/2012). This amendment introduces simplifications for first-time adopters and companies that could not use IFRSs due to hyperinflation.

The application of this amendment is not expected to have any effect on the Group’s accounts.

Amendments to IAS 1 – Presentation of Financial Statements (Regulation 475/2012). These amendments, issued by the IASB on 16 June 2011, require the aggregation of items of other comprehensive income in two categories, one involving items that can be reclassified subsequently to profit or loss and one involving items that will never be reclassified to profit or loss. Application is retrospective.  

The application of this amendment is not expected to have any effect on the Group’s accounts.

Amendments to IAS 19 – Employee benefits (Regulation 475/2012). The amendments, issued by the IASB on 16 June 2011, concern such substantive aspects as: the elimination of the “corridor method” to account for actuarial gains and losses; the presentation and recognition of changes in assets and liabilities arising from defined benefit plans in the income statement and in other comprehensive income; enhanced disclosure requirements for defined benefit plans and the risks that entities participating in those plans are exposed to. These amendments apply retrospectively.

As the Group applied the corridor method, in accordance with IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors, until 31 December 2012, the opening balances of the relevant items in the statement of financial position were restated, together with comparative balances. Reference is made to “Summary of adjustments” in these notes for the analysis of the effects of this amendment for the group’s accounts.

Amendment to IAS 32 –  Financial Instruments: Presentation – Disclosure and amendment to IFRS 7 – Financial Instruments: Disclosure (Regulation 1256/2012). The amendment, issued by the IASB on 16 December 2011, concerns the offsetting of assets and liabilities and the relevant disclosure requirements in connection with certain financial instruments. As to IAS 32, the amendment applies retrospectively as of 1 January 2014. With respect to IFRS 7, the amendments came into force as of 1 January 2013. The required disclosure must be provided retrospectively.  

IFRS 13– Fair Value Measurement (Regulation 1255/2012). The amendment, issued by the IASB on 12 May 2011, defines the concept of fair value, provides guidance for its determination and introduces qualitative and quantitative disclosure common to all items recognised at fair value, to guarantee greater consistency and reduce complexity. The amendment is applied prospectively and, currently, it has not had any effect on the Group’s accounts.   

IFRIC 20 – “Stripping Costs in the Production Phase of a Surface Mine” (Regulation 1255/2012).

This interpretation, which was published by the IASB on 19 October 2011, applies prospectively but has no bearing on the Group’s industry and, consequently, on its accounts.

Amendments to IFRS 1– First-time Adoption of International Financial Reporting Standards: Government loans (Regulation 183/2013). Document issued by the IASB on 19 March 2011. With reference to loans provided to an entity by government at a below-market rate, the amendment allows a first-tme adopter to apply IAS 20 prospectively, not changing the amount recognised initially for than loan, if this had not been accounted for in accordance with IAS 39.

On 17 May 2012 the International Accounting Standards Board (IASB) published “Improvements to International Financial Reporting Standard (2009-2011 Cycle)”, which were subsequently adopted by the European Union with Regulation 301/2013. These improvements include amendments to the following existing international accounting standards:

  • Improvement IFRS 1 – First-Time Adoption of International Financial Statements: Repeat application. This improvement clarifies that in case of new transition to IFRSs, if the entity had switched again to different GAAP, it is necessary to apply IFRS 1 again. 
  • Improvement IFRS 1 – First-Time Adoption of International Financial Statements: Capitalised borrowing costs. This improvement clarifies that, on first-time adoption, an entity is not required to restate the borrowing cost component that was capitalised in the carrying amount of an asset but will use IAS 23 subsequently.  
  • Improvement IAS 1 – Presentation of Financial Statements: Comparative information.

This improvement clarifies that additional comparative information must be presented in accordance with IAS/IFRSs. In addition, in case of retrospective adjustments, the entity is required to present a statement of financial position at the beginning of the comparative period (third statement of financial position), without providing complete information for this statement but only for the items concerned.  

  • Improvement IAS 16 – Property, Plant & Equipment: Classification of servicing equipment. This improvement clarifies that servicing equipment must be classified as property, plant and equipment if it is used for more than one fiscal year and inventories, if it is used for only one fiscal year.   

·         Improvement IAS 32 – Financial Instruments Presentation: Income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction must be accounted for in accordance with IAS 12 Income Taxes

  • Improvement IAS 34 – Interim Financial Reporting: Total assets for a segment. The improvement clarifies that total assets must be indicated only if that information is used by management and if there has been a material change from the amount disclosed in the last annual financial statements for that reportable segment.

The application of these improvements is not expected to have any effects on the Group’s accounts.

Accounting standards, amendments and interpretations endorsed by the European Union which are not yet applicable and have not been adopted early by the Group.

Starting 1 January 2014 the IAS/IFRSs and amendments to IAS/IFRSs listed below will apply, as they have already completed the EU’s endorsement process:

IFRS 10 – Consolidated Financial Statements (Regulation 1254/2012). Published by the IASB on 12 May 2011, this IFRS replaces IAS 27 “Consolidated and Separate Financial Statements” and SIC-12 “Consolidation—Special Purpose Entities”. The new standard introduces a new definition of control, sets out the concept of de facto control (control with less than the majority of voting rights) and clarifies the link between control and agency relationship. Application is retrospective.

 The Group is currently considering the potential effects deriving from the adoption of this IFRS on its consolidated financial statements.  

IFRS 11 – Joint Arrangements (Regulation 1254/2012). Published by the IASB on 12 May 2011, this IFRS replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities–Non-monetary Contributions by Venturers. The new IFRS draws a distinction between a joint operation and a joint venture, emphasising the rights and obligations of the parties to a joint arrangement, more than the legal form of the arrangements. Application is retrospective. 

The Group is currently considering the potential effects deriving from the adoption of this IFRS on its consolidated financial statements.  

IFRS 12– Disclosure of Interests in Other Entities (Regulation 1254/2012). Published by the IASB on 12 May 2011, this is a new IFRS to be applied when an entity has interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. An entity discloses information about significant judgments and assumptions it has made   in determining the existence of control, joint control or significant influence over another entity. The Group is currently considering the potential effects deriving from the adoption of this IFRS on its consolidated financial statements.  

IAS 27 Revised Separate Financial Statements (Regulation 1254/2012). Amendment introduced by the IASB on 12 May 2011, due to the issue of IFRS 10, to limit the application of IAS 27 to separate financial statements. This standard provides for the accounting treatment of investments in subsidiaries, associated companies and joint ventures in separate financial statements.  

IAS 28 Revised – Investments in Associates and Joint Ventures (Regulation 1254/2012). Amendment introduced by the IASB on 12 May 2011, due to the issue of IFRS 10 and IFRS 11, to provide for the treatment of investments in associates ad joint ventures and to set out the criteria for the application of the equity method.  

Amendments to IFRS 10, IFRS 11 and IFRS 12 – Transition guidance (Regulation 313/2013). The paper, published by the IASB on 28 June 2012, clarifies first-time application of IFRS 10 and provides guidance in case the application of IFRS 10 causes the consolidation or deconsolidation of an entity. In addition, relief is provided with reference to the first-time application of IFRS 11 and IFRS 12.  

Accounting standards, amendments and interpretations not yet endorsed by the European Union

The following changes in and amendments to IFRSs (already approved by the IASB) and the following interpretations (already approved by the IFRS IC) are being reviewed for endorsement by the competent bodies of the European Union.

IFRS 9 – Financial instruments. Published by the IASB on 12 November 2009 and subsequently amended. This IFRS, whose application was postponed until 1 January 2015, is part of a broader multi-stage project designed to replace IAS 39. It introduces new criteria to account for financial assets and liabilities, the derecognition of financial assets and the treatment and recognition of hedging transactions.

Amendments to IFRS 10, IFRS 12 and IAS 27 – Investment Entities. Amendments issued by the IASB on 31 October 2012. The paper introduces the exemption of entities that recognise their investments at fair value (investment entities) from the consolidation requirements set out by IFRS 10, as the Board considers disclosure of the way these entities measure the fair value of their assets and liabilities more meaningful than that made with the consolidation of their assets and liabilities. In addition, the paper clarifies that an investment entity is not required to apply IFRS 3 at the time it obtains control of an entity, but can measure fair value in accordance with IFRS 9 or IAS 39. Guidance is provided on the treatment of separate financial statements and on the type of disclosure to be provided.

Amendments to IAS 36 – Recoverable Amount Disclosures for Non-Financial Assets. Amendments issued by the IASB on 29 May 2013 and applicable retrospectively starting from 1 January 2014.   The paper indicates that disclosure requirements on the recoverable amounts of assets and GCUs apply only when impairment charges are made or previous impairment charges are reversed. It also provides clarifications on the disclosure required in case of asset impairment, when recoverable amount has been determined by using fair value, minus transaction costs.   

Amendments to IAS 39 – Novation of derivatives and continuation of hedge accounting.  Amendments issued by the IASB on 27 June 2013 and applicable retrospectively as of 1 January 2014, with earlier application permitted. The paper indicates a number of exemptions to the hedge accounting requirements set out by IAS 39, in the case where a derivative must be replaced with a derivative which has a direct or indirect central counterparty, as a consequence of law or regulations.  In particular, the objective of the amendments is to avoid any impact on an entity’s hedge accounting from derecognising the derivative, following its novation, unless specific conditions are met.  

IFRIC 21 – Levies. Interpretation issued by the IFRS IC on 20May 2013 and applicable retrospectively as of 1 January 2014 or subsequently. The interpretation was issued to set out the accounting treatment of levies, i.e. payments to a government entity for which the entity does not receive specific goods or services. The paper identifies different types of levies, clarifying the event that gives rise to the obligation which in turn must be accounted for as a liability, in accordance with IAS 37. 

 

4Revenue 
5Other operating revenues
6Use of raw materials and consumables 
7Service costs
8Personnel costs
9Amortisation, depreciation,provisions
10Other operating costs
11Capitalised costs
 Operating profit
12Portion of profits (loss) pertaining to associated companies
13Financial income
13Financial expense
 Total financial operations
14Other non-recurring non-operating income
15Taxes for the period
15.1Earnings per share
16Property, plant and equipment 
17Intangible assets 
18Property investments
19Goodwill
20Non-controlling interests 
21Financial assets 
22Deferred tax assets
23Financial instruments - derivatives
24Inventories
25Trade receivables 
26Contract work in progress 
27Financial assets 
28Current tax assets
29Other current assets
30Cash and cash equivalents
31Non-current assets held for sale
32Share capital and reserves
33Borrowings – maturing beyond 12 months
34Post-employment benefits 
35Provisions for risks and charges
36Deferrred tax liabilities
37Finance lease payments - maturing beyond 12 months
23Financial instruments - derivatives
33Banks and other borrowings – maturing within 12 months
37Finance lease payments - maturing within 12 months
38Trade payables
39Current tax liabilities
40Other current liabilities
23Financial instruments - derivatives
31Non-current assets held for sale