New Accounting Standards

Accounting Standards Applied for the First Time in 2011

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Standard/
Interpretation

 

 

 

Mandatory from

 

Endorsed by EU

 

Substantial Changes and Impact on WACKER

 

Amendments to IFRS 1

 

Limited Exemption from Comparative IFRS 7 Disclosures for First-Time Adopters

 

July 1, 2010

 

June 30, 2010

 

In the absence of relevant circumstances, there was no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

Amendments to IAS 32

 

Classification of Rights Issues

 

Feb. 1, 2010

 

Dec. 23, 2009

 

In the absence of relevant circumstances, there was no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

IFRIC 19

 

Extinguishing Financial Liabilities with Equity Instruments

 

July 1, 2010

 

July 23, 2010

 

In the absence of relevant circumstances, there was no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

Amendments to IFRIC 14

 

Prepayments of Minimum Funding Requirements

 

Jan. 1, 2011

 

July 19, 2010

 

The amendments had no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

IAS 24

 

Related Party Disclosures

 

Jan. 1, 2011

 

July 19, 2010

 

The revised version clarifies the definition of the term “related party.” An exemption option has also been introduced for entities that are controlled by a public body. The amendments had no substantial impact on the presentation of WACKER’s financial statements. The related parties have not changed.

 

Miscellaneous

 

Amendments resulting from the annual improvements to IFRSs (2008–2010 cycle) issued by the IASB in May 2010

 

Jan. 1, 2011, and July 1, 2010

 

Feb. 18, 2011

 

Miscellaneous amendments. The amendments had no substantial impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

Accounting Standards/Interpretations Not Applied Prematurely
The International Accounting Standards Board (IASB) has published the following standards, interpretations, and changes to existing standards of which the application is not yet mandatory and which WACKER is not applying earlier than required. In cases where there is no official German translation of new standards or interpretations, we shall use the English title of the relevant new official statement. WACKER continuously evaluates the new standards to determine their impact on the consolidated financial statements.

Standards, Interpretations, and Changes to Existing Standards Already Endorsed by the EU

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Standard/
Interpretation

 

 

 

Application Date

 

Endorsed by EU

 

Anticipated Impact on WACKER

 

Amendment to IFRS 7

 

Disclosure requirements relating to transfers of financial assets

 

July 1, 2011

 

Nov. 22, 2011

 

The application of the revised standard will have no substantial impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

Standards, Interpretations and Changes to Existing Standards Not Yet Endorsed by the EU

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Standard/
Interpretation

 

 

 

Publication by IASB

 

Application Date

 

Endorsed by EU

 

Anticipated Impact on WACKER

 

Amendments to IFRS 1 for First-time Adopters

 

Severe Hyperinflation and Removal of Fixed Dates

 

Dec. 20, 2010

 

July 1, 2011

 

Expected in Q2 2012

 

The amendment replaces the existing references to the date of January 1, 2004, by a reference to the timing of the transition to IFRS. This amendment also includes rules for those cases in which hyperinflation makes it impossible for an entity to comply with all IFRS stipulations. Its application will have no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

Amendments to IFRS 7

 

Offsetting Financial Assets and Financial Liabilities

 

Dec. 16, 2011

 

Jan. 1, 2013

 

Q3 2012

 

These amendments to IFRS 7 extend the disclosure requirements regarding the netting of financial assets and financial liabilities. The added disclosure requirements will have an impact on the presentation of the financial statements.

 

Amendments to IFRS 9 and IFRS 7

 

Mandatory Effective Date of IFRS 9 and Transition Disclosures

 

Dec. 16, 2011

 

Jan. 1, 2015

 

Postponed

 

The amendments postpone the effective data of IFRS 9 and provide for additional disclosure requirements. Because WACKER cannot yet assess what impacts the first-time application of IFRS 9 will have, it is also not yet possible to evaluate the potential impact of these amendments of IFRS 9 and IFRS 7.

 

IFRS 9

 

Financial Instruments

 

Nov. 12, 2009

 

Jan. 1, 2015

 

Postponed

 

In the future, financial assets will be measured either at amortized cost or at fair value, depending on the business model of the company in question. At the moment, WACKER cannot conclusively assess what impacts the first-time application of this standard will have, should it be endorsed by the EU in its current form.

 

IFRS 10

 

Consolidated Financial Statements

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

IFRS 10 changes the definition of “control” so that the same criteria are applied to all companies in determining control. The standard replaces the consolidation guidelines currently provided for in IAS 27 and SIC 12. The new rules may lead to major changes in the scope of consolidation compared with the previous determination of the Group pursuant to IAS 27. WACKER is currently of the opinion that application of the revised standard will have no influence on the current determination of the scope of consolidation.

 

IFRS 11

 

Joint Arrangements

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

IFRS 11 regulates the accounting of arrangements where a company exercises joint control over a joint venture or a joint operation. The standard replaces IAS 31. In the future, joint ventures will be accounted for using exclusively the equity method. The option of proportionate consolidation has been abolished. The abolition of proportionate consolidation has no impact on WACKER’s earnings, net assets and financial position because WACKER already accounts for joint ventures using the equity method. WACKER cannot yet assess what other impacts may result from the application of IFRS 11, including in respect of joint operations.

 

IFRS 12

 

Disclosure of Interests in Other Entities

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

IFRS 12 regulates the disclosures in the consolidated financial statements that enable users to assess the nature of, risks associated with and financial consequences of the entity’s involvement in subsidiaries, associates, joint arrangements and unconsolidated structured entities. Application of the revised standard will lead to a substantial broadening of the disclosures in WACKER’s consolidated financial statements.

 

IFRS 13

 

Fair Value Measurement

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

IFRS 13 describes how fair value is to be measured and extends the disclosures on fair value. Application of the new method of determining fair value will be relevant to all areas of WACKER’s consolidated financial statements in which fair values are determined. WACKER does not expect the new approach to have any substantial impact on its earnings, net assets and financial position. The disclosure obligations in the consolidated financial statements will increase.

 

Amendments to IAS 1

 

Presentation of Items of Other Comprehensive Income

 

June 16, 2011

 

July 1, 2012

 

Expected in Q1 2012

 

The application of the revised standard will have no impact on WACKER’s earnings, net assets and financial position. The presentation in WACKER’s financial statements of items of other comprehensive income will be enhanced.

 

Amendments to IAS 12

 

Deferred Tax: Recovery of Underlying Assets

 

Dec. 20, 2010

 

Jan. 1, 2012

 

Expected in Q2 2012

 

The amendment contains a partial clarification on the treatment of temporary taxable differences from IAS 40’s fair value model. Investment property often makes it difficult to assess whether existing differences are recovered as part of continuing use or in the wake of a sale. The amendment therefore generally makes it necessary to presume recovery due to a sale. Its application will have no substantial impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements. WACKER measures its investment property exclusively at amortized cost.

 

Amendments to IAS 19

 

Employee Benefits

 

June 16, 2011

 

Jan. 1, 2013

 

Expected in Q1 2012

 

The amendments to IAS 19 will affect the recognition and measurement of the expense for defined benefit pension plans and termination benefits. They will also result in wider disclosure requirements regarding employee benefits The option of accounting for actuarial gains and losses using the corridor method is eliminated. In the future, these impacts will be recognized immediately in other comprehensive income. Because WACKER currently applies the corridor method, this change is expected to result in a substantial increase in pension provisions when adopted for the first time, which in turn will reduce the Group’s equity. Such recognition within other comprehensive income of variations in actuarial gains and losses will lead to more volatility in equity in the future.

 

IAS 27

 

Separate Financial Statements

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

In the future, IAS 27 will deal only with separate financial statements. The existing guidelines for separate financial statements remain unchanged. The application of the revised standard will have no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

IAS 28

 

Investments in Associates and Joint Ventures

 

May 12, 2011

 

Jan. 1, 2013

 

Expected in Q3 2012

 

IAS 28 now also regulates the accounting of joint ventures using the equity method. The application of the revised standard will have no substantial impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.

 

Amendments to IAS 32

 

Offsetting Financial Assets and Financial Liabilities

 

Dec. 16, 2011

 

Jan. 1, 2014

 

Q3 2012

 

This amendment to IAS 32 clarifies the requirements governing the offsetting of financial instruments. The application of the revised standard will have no substantial impact on WACKER’s earnings, net assets and financial position.

 

IFRIC 20

 

Stripping Costs in the Production Phase of a Surface Mine

 

Oct. 19, 2011

 

Jan. 1, 2013

 

Expected in Q2 2012

 

IFRIC 20 regulates the accounting treatment of the cost of removing waste from a surface mine. In the absence of relevant circumstances, the interpretation has no impact on WACKER’s earnings, net assets and financial position, or on the presentation of its financial statements.