Nokia 2008 Annual Report Download - page 153

Notes to the Consolidated Financial Statements
1. Accounting principles
Basis of presentation
The consolidated financial statements of Nokia Corporation (“Nokia” or “the Group”), a Finnish public
limited liability company with domicile in Helsinki, in the Republic of Finland, are prepared in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards
Board (“IASB”) and in conformity with IFRS as adopted by the European Union (collectively “IFRS”). The
consolidated financial statements are presented in millions of euros (“EURm”), except as noted, and are
prepared under the historical cost convention, except as disclosed in the accounting policies below. The
notes to the consolidated financial statements also conform to Finnish Accounting legislation. On March 5,
2009, Nokia’s Board of Directors authorized the financial statements for issuance and filing.
As described in Note 8 the Group completed the acquisition of all of the outstanding equity of NAVTEQ
Corporation (“NAVTEQ“) on July 10, 2008 and a transaction to form Nokia Siemens Networks on
April 1, 2007. The NAVTEQ and the Nokia Siemens Networks business combinations have had a
material impact on the consolidated financial statements and associated notes.
Adoption of pronouncements under IFRS
In the current year, the Group has adopted all of the new and revised standards, amendments and
interpretations to existing standards issued by the IASB that are relevant to its operations and
effective for accounting periods commencing on or after January 1, 2008.
• IFRS 8, Operating Segments requires the segment information to be presented on the same
basis as that used for internal reporting purposes. Under IFRS 8, segments are components of
the entity that are regularly reviewed by the chief operating decisionmaker in order to
allocate resources to a segment and to evaluate its performance.
• IFRIC 11, IFRS 2 — Group and Treasury Share Transactions clarifies how IFRS 2 should be applied to
sharebased payment arrangements involving treasury shares, and arrangements involving grant of
the entity’s own equity instruments or equity instruments of another entity within the same group.
• IFRIC 14 and IAS 19, The Limit on a Defined benefit Asset, Minimum Funding Requirements and
their Interaction addresses when refunds or reductions in future contributions should be
regarded as available when measuring a pension asset and how a minimum funding
requirement might affect the availability of reductions in future contributions.
• IAS 39 and IFRS 7 (Amendments), Reclassification of Financial Instruments allow an entity to
reclassify nonderivative financial assets out of the fair value through profit or loss and
availableforsale categories in particular circumstances and require additional disclosures for
the reclassifications.
The adoption of each of the above mentioned standards did not have a material impact to the
Group’s balance sheet, profit and loss or cash flows.
Principles of consolidation
The consolidated financial statements include the accounts of Nokia’s parent company (“Parent
Company”), and each of those companies over which the Group exercises control. Control over an
entity is presumed to exist when the Group owns, directly or indirectly through subsidiaries, over
50% of the voting rights of the entity, the Group has the power to govern the operating and financial
policies of the entity through agreement or the Group has the power to appoint or remove the
majority of the members of the board of the entity.
The Group’s share of profits and losses of associated companies is included in the consolidated profit
and loss account in accordance with the equity method of accounting. An associated company is an
entity over which the Group exercises significant influence. Significant influence is generally presumed
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