APC 2006 Annual Report Download - page 174

3. Comparison
of Schneider Electric and APC
accounting principles
As explained in note 1 of consolidated financial state-
ments, Schneider Electric’s consolidated financial
statements have been prepared in compliance with the
international accounting standards adopted by the
European Union as of December 31, 2006. These
include International Financial Reporting Standards
(IFRSs), International Accounting Standards (IASs)
and the related interpretations issued by the Interna-
tional Financial Reporting Interpretations Committee
(IFRIC) and the Standing Interpretations Committee
(SIC).
APC’s consolidated financial statements have been
prepared in accordance with the accounting principles
generally accepted in the United States of America
(US GAAP). The adjustments made to APC’s US
GAAP accounts to prepare the pro forma financial
information under IFRS were estimated by Schneider
Electric’s Finance Department based on the descrip-
tion of accounting policies contained in APC’s annual
financial statements.
3.1 Financial statement presentation
and foreign currency translation
The main income statement and balance sheet cap-
tions in the APC Group’s financial statements have
been reclassified to permit their combination with the
main captions in the Schneider Electric Group’s finan-
cial statements.
In particular, deferred taxes have been reclassified
from current assets and liabilities to non-current assets
and liabilities, to comply with IAS 12 -
Income Taxes.
Other reclassifications may also be made when APC is
included for the first time in the Schneider Electric
Group’s published consolidated financial statements.
APC’s financial statements have been translated from
US dollars, corresponding to the company’s functional
currency, into euros, representing the Schneider Elec-
tric Group’s presentation currency, as follows: Assets
and liabilities have been translated at the exchange
rate on the balance sheet date and income and
expenses have been translated at the average rate for
the year. The exchange rates applied are as follows:
Dollar/euro exchange rate 2006
Exchange rate on December 31 0.759301
Average rate 0.797780
LIABILITIES AND EQUITY Schneider APC APC APC Schneider
Electric US GAAP adjustments IFRS Electric
IFRS unaudited US GAAP unaudited + APC
to IFRS IFRS
(in millions of euros) unaudited unaudited
Equity
Share capital 1,821.6 1.4 - 1.4 1,823.0
Share premium account 4,121.0 76.9 - 76.9 4,197.9
Retained earnings 2,773.9 1,168.0 - 1,168.0 3,941.9
E quity attributable to equity holders of the parent 8,716.5 1,246.3 - 1,246.3 9,962.8
Minority interests 121.6 - - - 121.6
Total equity 8,838.1 1,246.3 - 1,246.3 10,084.4
Long-term provisions
Provisions for pensions
and other post-employment benefits 1,159.0 - - - 1,159.0
Provisions for contingencies 283.1 - - - 283.1
Total long-term provisions 1,442.1 - - - 1,442.1
Non-current liabilities
Ordinary and convertible bonds 3,237.9 - - - 3,237.9
Perpetual bonds - - - - -
Other long-term debt 219.2 - - - 219.2
Total non-current financial liabilities 3,457.1 - - - 3,457.1
Deferred tax liabilities 305.3 7.7 - 7.7 313.0
Other non-current liabilities 90.2 - - - 90.2
Total non-current liabilities 5,294.6 7.7 - 7.7 5,302.3
Current liabilities
Current operating liabilities 3,947.0 342.5 - 342.5 4,289.5
Short-term debt 884.6 - - - 884.6
Total current liabilities 4,831.6 342.5 - 342.5 5,174.1
Total equity and liabilities 18,964.3 1,596.5 - 1,596.5 20,560.8
172
Unaudited pro forma information related to the 2006 consolidated financial statements