Commission Regulation (EU) No. 475/2012 of 5 June 2012 adopted changes to IAS 19 “Employee benefits”, revised by the IASB on 16 June 2011, which provide for, among other things: (i) the obligation to recognise actuarial gains and losses in the statement of comprehensive income, removing the possibility of adopting the corridor method. Actuarial gains and losses recognised in the statement of comprehensive income are not subsequently posted to the income statement; and (ii) the removal of the separate disclosure of cost components relating to defined-benefit liabilities, represented by the expected return from assets servicing the plan and the interest cost, and the replacement with the aggregate “Net interest”. The new provisions apply from the financial year beginning 1 January 2013.
There is a negative impact of around €21 million for the Group from adjusting the provisions for employee benefits as a counter-entry in shareholders’ equity on the date that the changes to the international accounting standard came into effect.
Commission Regulation (EU) No. 1254/2012 of 11 December 2012 adopted IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements” and IFRS 12 “Disclosure of Interests in Other Entities” as well as revised IAS 27 “Separate Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”.
IFRS 10 “Consolidated Financial Statements” (hereinafter “IFRS 10”) and the updated version of IAS 27 “Separate Financial Statements” (hereinafter “IAS 27”) set out, respectively, the principles to be adopted for the presentation and preparation of consolidated financial statements and individual financial statements. IFRS 10 provides, inter alia, a new definition of control to be applied uniformly to all companies (including special purpose entities). According to this definition, a company controls an associate when the company is exposed, or has rights, to variable returns from its involvement with the associate and has the ability to affect those returns through its power over the associate. The standard lists the factors to be considered when assessing whether control exists, which include, inter alia, potential rights, protective rights, whether the investor acts as an agent or franchising arrangements. Furthermore, the new provisions also recognise the possibility of exercising control over an associate even without holding the majority of voting rights due to a dispersed shareholder base or the passive attitude of other investors.
IFRS 11 “Joint Arrangements” (hereinafter “IFRS 11”) replaces IAS 31 “Interests in Joint Ventures” and SIC 13 “Jointly Controlled Entities - Non-Monetary Contributions by Venturers”. IFRS 11 identifies two types of arrangement (joint operations and joint ventures) based on the rights and obligations of participants, and also establishes the criteria for identifying joint control and governs the resulting accounting treatment to be adopted for their recognition in financial statements. For the recognition of joint ventures, the new provisions indicate the equity method as the only permitted treatment, removing the possibility of using proportional consolidation. The updated version of IAS 28 defines, inter alia, the accounting treatment to be adopted in the event of the total or partial divestment of a holding in an associate or joint venture.
IFRS 12 “Disclosure of Interests in Other Entities” (hereinafter “IFRS 12”) specifies the disclosure requirements for joint arrangements and subsidiaries and associates, including the requirement to specify significant assumptions (and any changes thereto) made for the purpose of determining the existence of joint control (with regard to significant influence) and the type of joint arrangement when the arrangement has been structured through a special purpose entity.
The provisions of IFRS 10, IFRS 11 and IFRS 12 and of the new versions of IAS 27 and IAS 28 will take effect from financial years starting on or after 1 January 2014.
Commission Regulation (EU) No. 1255/2012 of 11 December 2012 adopted IFRS 13 “Fair Value Measurement”, which includes a series of guidelines on measuring the fair value of financial and non-financial assets and liabilities where another IFRS requires or permits fair value measurement or additional disclosure thereon. IFRS 13 will apply from financial years beginning on or after 1 January 2013.
Commission Regulation (EU) No. 1256/2012 of 13 December 2012 adopted the amendments to IFRS 7 “Financial Instruments: Disclosures” and to IAS 32 “Financial Instruments: Presentation”, which respectively provide for the removal of paragraph 13 of IFRS 7 (on the transfer of financial assets that do not qualify for derecognition from the financial statements of the transferor) and the insertion of additional guidelines to make application of the standard more consistent (particularly with regard to offsetting financial assets and liabilities). The amendments to IFRS 7 and to IAS 32 take effect, respectively, from financial years starting on or after 1 January 2013 and 1 January 2014.
At present, Snam is analysing the standards mentioned and is assessing whether their adoption will have a significant impact on the financial statements.
Commission Regulation (EU) No. 1255/2012 also adopted the amendments to IFRS 1 “First-Time Adoption of International Financial Reporting Standards”, to IAS 12 “Income Taxes” and to IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”. These amendments involved, respectively, introducing an exemption from IFRS 1 for entities subjected to severe hyperinflation, introducing an exception to tax measurement of fair value investment property and defining practical guidelines for measuring stripping costs in the production phase of a mine. The amendments to IFRS 1, IAS 12 and IFRIC 20 are not applicable to Snam.
Accounting standards and interpretations issued by the IASB/IFRIC and not yet approved by the European Commission
On 13 March 2012, the IASB issued the document “Amendments to IFRS 1”, which introduced an exception to be applied to first-time adopters of IFRS, whereby government loans must be measured prospectively at the date of transition to IFRS as per the requirements of IFRS 9 “Financial Instruments” and IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance”.
On 17 May 2012, the IASB issued the document “Annual Improvements to IFRSs 2009 – 2011 Cycle”, containing mainly technical and editorial amendments to the existing international accounting standards.
On 28 June 2012, the IASB issued the document “Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)”, which provides some clarifications and simplifications of the transition requirements of IFRS 10, IFRS 11 and IFRS 12.
These measures will take effect from financial years starting on or after 1 January 2013. However, it should be stressed that this date of effect is likely to be deferred as the measures are yet to be adopted by the European Commission.
At present, Snam is analysing the standards mentioned and is assessing whether their adoption will have a significant impact on the financial statements.
On 31 October 2012, the IASB issued the document “Amendments to IFRS 10, IFRS 12 and IAS 27”, which provides clarification on the definition of the scope of consolidation for companies that qualify as investment entities. The measures will take effect from financial years starting on or after 1 January 2014. The amendments to IFRS 10, IAS 12 and IAS 27 are not applicable to Snam.
