Page 43 - Bouvet årsrapport ENG 2010 ePub

Bouvet annual report 2010 43

be presented as expense or income. Distri-butions to owners of fnancial instruments classifed as equity will be set of directly against equity. When rights and obliga-tions connected to how distributions from fnancial instruments will be carried out depend on certain types of uncertain future events and are outside both the issuer’s and owner’s control, the fnancial instrument will be classifed as debt if it, at the time of issue, is improbable that the issuer will have to pay cash or other fnancial assets. In that case, the fnancial instrument is classifed as equity.

Own shares

On repurchase of own shares, costs in-cluding directly attributable expenses are recorded as a change in equity. Own shares are disclosed as a reduction of equity. Gains or losses on transactions with own shares are not recognised in the income statement.

Costs of equity transactions Transaction costs directly relating to an equity transaction are set of directly against equity after deducting tax expenses.

Employee benefits

Defined contribution plan Te Group has a defned contribution plan by which it is committed to contribute to each employee’s pension plan with a fxed amount. Te future pension depends on the size of the contributions and the yield on the pension savings. Te Group’s obligation is fully met when paid. Te pension costs are charged as an expense when accrued.

Defined benefit plan

Te Group has a closed defned beneft plan for a limited number of employees. Accord-ing to the scheme, the employees are entitled to future agreed pension contributions, where the contributions are based on the number of years of earning and the salary level at the time of retirement. Pension costs, pension obligations and pension funds are calculated on straight-line earnings based on future assumptions on discount interest rate, future salary regulations, pensions and yields from national insurance, future yields on pension funds and actuarial assumptions on mortality,

natural attrition etc. Net pension obligations are disclosed as long-term debt in the balance sheet. Changes in the liability and the pen-sion funds due to changes in and deviations from the assumptions for calculation (estima-tion changes) are distributed over the average remaining earning time if the deviation at the beginning of the year exceeds 10% of gross pension commitments or pension funds (cor-ridor), whichever the larger.

Provisions

A provision is recognised when the Group has an obligation as a result of a previous event and it is probable that a fnancial settlement will take place as a result of this obligation and the size of the amount can be measured reli-ably. If the efect is considerable, the provision is calculated by discounting estimated future cash fows using a discount rate before tax that refects the market’s pricing of the time value of money and, if relevant, risks specifcally linked to the obligation.

Potential restructuring provisions are recognised when the Group has approved a detailed, formal restructuring plan and the restructuring has either started or been publicly announced within the company.

Provisions for loss-making contracts are recognised when the Group’s estimated revenues from a contract are lower than una-voidable costs which were incurred to meet the obligations pursuant to the contract.

Contingent liabilities and assets

Unlikely contingent liabilities are not rec-ognised in the annual accounts. Signifcant contingent liabilities are disclosed, with the exception of contingent liabilities that are unlikely to be incurred.

Contingent assets are not recognised in the annual accounts but are disclosed if there is a certain probability that a beneft will be added to the Group.

Events after the balance sheet date

New information on the Group’s position at the balance sheet date is taken into account

in the fnancial statements. Events after the balance sheet date that do not afect the Group’s position at the balance sheet date, but will afect the Group’s position in the future, are stated if signifcant.

New and amended standards and interpretations

IFRS and IFRIC issued but not adopted by the Group

Te following standards and amendments to existing standards have been published and are mandatory for the group’s account-ing periods beginning on or after 1 January 2011 or later periods, but the group has not early adopted them. Efective date is set to EU’s efective date in cases where it difers from the IASB efective date.

• IFRS 9 Financial instruments, efective 1 January 2013.

• IFRS 7 Financial instruments: Disclosures – Transfers of Financial Assets (amended), efective date not determined by EU. (IASB 1. July 2011).

• IAS 12 Income tax (amendment), efective date not determined by EU. (IASB 1. January 2012).

• IAS 24 Related parties (revised), efective 1 January 2011.

• IAS 32 Financial instruments: Presen-tation – Classifcation of Rights Issues (amended), efective 1 February 2010. • IFRIC 14 Prepayment of a Minimum Funding Requirement (amended), efective 1 January 2011. • IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments, efective 1 July 2010

• Improvements to IFRS – May 2010, efective date note determined by EU. (IASB 1 January 2011 to 1 July 2011)

Te Group does not expect that the adoption of these standard or interpreta-tion would have a material impact on the fnancial statements or performance of the Group.