Page 80 - EVRY Annual Report 2012

Annual Accounts Group 80
Recognition of deferred tax assets
If there are net tax reducing timing differences, or there are tax reducing timing differences which cannot be offset, a
deferred tax asset is recognised in the statement of financial position at the amount that it is likely to be realized. If the tax
reducing timing differences are related to losses carried forward, the assessment of deferred tax asset will be based on the
expectation of future taxable profit. Expectations of future taxable profit are documented on the basis of approved budgets.
4.Approved changes to IFRS and IFRIC that came into force after the date of the accounts
The following paragraphs provide an overview of changes to IFRS/IAS standards that are relevant to the group’s activi-
ties but have not yet come into effect. The group anticipates that the implementation of the changes listed belowwill not
have any material effect on the consolidated accounts when the changes are made, with the exception of the imple-
mentation of the changes to IAS 9. The implementation effect of IAS 19 would have had a positive effect on consolidated
equity at 1 January 2012 of NOK 1.5 million and a negative profit/loss effect in 2012 of NOK 36.8 million. The effect on
consolidated equity at 31 December 2012 would have been NOK 164.8 million.
IFRS 7 - Amendment: New disclosure requirements - Offsetting of Financial Assets and Financial Liabilities.
The IASB has introduced new disclosure requirements in IFRS 7. These disclosures, which are similar to the newUS
GAAP requirements, would provide users with information that is useful in (a) evaluating the effect of potential effect of
netting arrangements on an entity’s financial position and (b) analysing and comparing financial statements prepared in
accordance with IFRSs and US GAAP. The amended IFRS 7 is effective for annual periods beginning on or after 1 January
2013. The amendment to IFRS 7 also applies to interimperiods in 2013. The Group expects to implement the amended
IFRS 7 as of 1 January 2013.
IFRS 9 Financial Instruments
Phase 1 of IFRS 9 Financial Instruments, the accounting standard that will eventually replace IAS 39 Financial
Instruments: Recognition and Measurement, has been published. IAS 39 has been widely criticised as a standard that
is complex and often difficult to apply. In order to expedite the replacement of IAS 39, the IASB divided the project
into phases. The main focus of the first phase is the classification andmeasurement of financial assets. As each phase is
completed, chapters with the new requirements will be added to IFRS 9, and the relevant portions deleted from IAS 39.
Phase 1 of IFRS 9 is applicable to all financial assets within the scope of IAS 39. At initial recognition, all financial assets
(including hybrid contracts with a financial asset host) are measured at fair value. For subsequent measurement, finan-
cial assets that are debt instruments are classified at amortised cost or fair value on the basis of both:
•The entity’s business model for managing the financial assets; and
•The contractual cash flow characteristics of the financial asset.
All other debt instruments are subsequently measured at fair value. All financial assets that are equity investments are
measured at fair value either through Other Comprehensive Income (OCI) or profit or loss. IFRS 9 is effective for annual
periods beginning on or after 1 January 2015, but the standard is not yet approved by the EU. The Group expects to apply
IFRS 9 as of 1 January 2015.
IFRS 10 Consolidated Financial Statements
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for
consolidated financial statements. It also includes the issues raised in SIC-12 Consolidation— Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities. The changes introduced by IFRS 10 will require
management to exercise significant judgement to determine which entities are controlled, and therefore are required to
be consolidated by a parent, compared with the requirements that were in IAS 27. In the standard an investor controls an
investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. This standard becomes effective for annual periods beginning
on or after 1 January 2014. The Group expects to apply IFRS 10 as of 1 January 2014.
IFRS 11 Joint Arrangements
IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities —Non-monetary Contributions
by Venturers. IFRS 11 uses some of the terms that were used IAS 31, but with different meanings. Thus, there may be
some confusion as to whether IFRS 11 is a significant change from IAS 31. For example, whereas IAS 31 identified three
forms of joint ventures (i.e., jointly controlled operations, jointly controlled assets and jointly controlled entities), IFRS 11
addresses only two forms of joint arrangements (joint operations and joint ventures) where there is joint control. IFRS 11
removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that
meet the definition of a joint venture must be accounted for using the equity method. For joint operations (which in-
cludes former jointly controlled operations, jointly controlled assets, and potentially some former JCEs), an entity recog-
nises its assets, liabilities, revenues and expenses, and/or its relative share of those items, if any. This standard becomes
effective for annual periods beginning on or after 1 January 2014. The Group expects to apply IFRS 11 as of 1 January 2014.