Wacker Chemie AG - Annual Report 2011 - New Accounting Standards

Accounting Standards Applied for the First Time in 2011

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.