APC 2012 Annual Report Download - page 170

2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC168
CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31, 2012
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, 2012.
Thesame accounting methods were used as for the consolidated
fi nancial statements for the year ended December31, 2011.
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, 2012:
•IFRS7 – Disclosures – Transfer of Financial assets.
There are no differences in practice between the standards applied
by Schneider Electric as of December31, 2012 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, 2012 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, 2012 or that are mandatory at some
point subsequent to December31, 2012:
•standards adopted:
–amendment to IAS 1 – Presentation of Items of Other
Comprehensive Income,
–IAS19 revised – Employee benefi ts,
–amendment to IAS12 – Recovery of Underlying Assets,
–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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;
•standards not yet adopted:
–IFRS9 – Financial instruments,
–Transition Guidance (Amendments to IFRS 10, IFRS11 and
IFRS12),
–Investment Entities (Amendments to IFRS 10, IFRS 12 and
IAS27),
–Improvements to IFRSs 2009-2011 (May2012),
–Government Loans (Amendments to IFRS1).
Schneider Electric is currently assessing their potential impact on
the Group’s consolidated fi nancial statements. In accordance with
IAS19 revised in June2011, the expected return on long term plan
assets in2013 will be equal to discount rate at December31, 2012
closing date. The assessment of the expected effect in 2013 is
EUR39million as a reduction of fi nancial income; moreover, IAS19
revised require the recycling through equity of past service costs, of
which the amortization was a gain of about EUR1million by year,
that will have a n expected effect of EUR17million at January1,
2013.
At this stage of analysis, the Group does not expect other impact
on its consolidated fi nancial statements to be material, except for
IFRS10 and IFRS11 for which impacts are being assessed, notably
on entities currently consolidated with proportional consolidation,
and except for IFRS9 due to uncertainties surrounding the adoption
process in Europe.
1.2 – Restated 2011 comparative statement
of income, other comprehensive income,
statement of cash flows, balance sheet and
statement of changes in equity
A specifi c internal control review of one entity was conducted
in2012 that resulted in identifying an accounting error in customer
rebates accrual recognition. This error resulted from irregularities
carried out by one former employee with the purpose of presenting
overestimated revenues by deferring the booking of customer
rebates. As presented below in the income statement, customers’
rebate accrual booked in2011 were underestimated (thus revenues
were overestimated) by EUR42 million. At December 31, 2011,
trade receivables were overestimated by EUR82 million (amount
including VAT). In accordance with IAS 8, the Group restated
its 2011 comparative information in the consolidated fi nancial
statements at December31, 2012.
An action plan has been implemented in order to reinforce preventive
and detective controls.