APC 2011 Annual Report Download - page 162

160 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
CONSOLIDATED FINANCIAL STATEMENTS
5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note1 Accounting Policies
1.1 – Accounting standards
The consolidated fi nancial statements have been prepared in
compliance with the international accounting standards (IFRS)
as adopted by the European Union as of December 31, 2011.
Thesame accounting methods were used as for the consolidated
fi nancial statements for the year ended December31, 2010.
The following standards and interpretations that were applicable
during the period did not have a material impact on the consolidated
fi nancial statements as of December31, 2011:
•amendment to IAS32 – Classifi cation of Rights Issues;
•amendment to revised IAS24 – Information on Related parties;
•2010 improvements to IFRS (May2010);
•amendment to IFRIC14 – Prepayment of a Minimum Funding
Requirement;
•IFRIC 19 – Extinguishing Financial liabilities with Equity
instruments.
There are no differences in practice between the standards applied
by Schneider Electric as of December31, 2011 and the IFRS issued
by the International Accounting Standards Board (IASB), since the
application of standards and interpretations that are mandatory for
reporting periods beginning on or after January1, 2011 but not yet
adopted by the European Union would not have a material impact.
Lastly, the Group did not apply the following standards and
interpretations that had not yet been adopted by the European
Union as of December31, 2011 or that are mandatory at some
point subsequent to December31, 2011:
•Standards adopted
–IFRS 7 – Disclosures – Transfert of Financial assets
•Standards not yet adapted
– amendment to IAS 1 – Presentation of Items of Other
Comprehensive Income;
–IAS12 – Recovery of Underlying Assets;
–IAS19 revised – Employee benefi ts;
–IAS27 revised – Separate Financial Statements;
–IAS28 revised – Investments in associates and joint-ventures;
–amendments to IAS 32 – Offsetting Financial assets and
Financial liabilities;
–amendments to IFRS7 – Disclosures – Transfer of Financial
assets;
–IFRS9 – Financial instruments;
–IFRS10 – Consolidated Financial Statements;
–IFRS11 – Joint Arrangements;
–IFRS12 – Disclosure of Interests in Other entities;
–IFRS13 – Fair value Measurement;
–amendment to IFRS1 – Severe Hyperinfl ation and Removal of
Fixed dates for First-Time Adopters;
–IFRIC 20 – Stripping Costs in the Production Phase of a
Surface Mine.
Schneider Electric is currently assessing their potential impact on
the Group’s consolidated fi nancial statements. At this stage of
analysis, the Group does not expect the impact on its consolidated
fi nancial statements to be material, except for IFRS10 and
IFRS11 for which impacts are being assessed on entities currently
consolidated with proportional consolidation, and except for IFRS9
due to uncertainties surrounding the adoption process in Europe.
The fi nancial statements provide data prepared in accordance with
IFRS for the years ended December31, 2011 and December31,
2010. The fi nancial statements for the year ended December31,
2009, presented in the Registration Document registered with
Autorité des Marchés Financiers (AMF) under number D10-0125
on March19, 2010, are incorporated by reference.
1.2 – Basis of presentation
The fi nancial statements have been prepared on a historical cost
basis, with the exception of derivative instruments and available- for-
sale fi nancial assets, which are measured at fair value. Financial
liabilities are measured using the amortised cost model. The book
value of hedged assets and liabilities and the related hedging
instruments corresponds to their fair value.
1.3 – Use of estimates and assumptions
The preparation of fi nancial statements requires Group and
subsidiary management to make estimates and assumptions
that are refl ected in the amounts of assets and liabilities reported
in the consolidated balance sheet, the revenues and expenses in
the statement of income and the obligations created during the
reporting period. Actual results may differ.
These assumptions mainly concern:
•the measurement of the recoverable amount of goodwill,
property, plant and equipment and intangible assets (note1.10);
•the realisable value of inventories and work in process (note1.12);
•the recoverable amount of accounts receivable (note1.13);
•the valuation of share-based payments (note1.19);
•the calculation of provisions for contingencies, in particular for
warranties (note1.20);
•the measurement of pension and other post-employment benefi t
obligations (note22).
1.4 – Consolidation principles
Subsidiaries over which the Group exercises exclusive control,
either directly or indirectly, are fully consolidated. Exclusive
control is control by all means, including ownership of a majority
voting interest, signifi cant minority ownership, and contracts or
agreements with other shareholders.
Group investments in entities controlled jointly with a limited number
of partners, such as joint ventures and alliances, are proportionally
consolidated in accordance with the recommended treatment
under IAS31 - Interests in Joint Ventures.