Philips 2005 Annual Report Download - page 214

Philips Annual Report 2005214
Accounting policies applied for Dutch law
purposes
As from 2005, Dutch law allows companies that apply IFRS as adopted
intheEuropeanUnionintheirconsolidatednancialstatementstouse
thesameaccountingprinciplesintheCompanynancialstatements.
Companynancialstatementsthatarebasedonthisprovisionqualifyas
nancialstatementsunderDutchlaw.
ThenancialstatementsofRoyalPhilipsElectronics(the‘Company’)
included in this section are prepared in accordance with IFRS accounting
principlesasusedintheconsolidatednancialstatements,inorder
tomaintaintheconsistencybetweentheguresintheconsolidated
nancialstatementsandthenancialstatementsoftheCompany.The
same basis as applied for the Company has also been applied for the
afliatedcompanies.Theaccountingprinciplesareexplainedstarting
atpage186intheconsolidatednancialstatements.Foranexplanation
of differences between the accounting policies applied in the Company
nancialstatementsandDutchGAAP,pleaserefertothereconciliation
from IFRS to Dutch GAAP on page 191.
Change of accounting policies
Due to the transition to IFRS accounting policies, the 2004 comparatives
have been amended. The main changes are related to the amount of
investmentinafliatedcompanies.Foranexplanationofthechangesin
afliatedcompaniesandequity,pleaserefertothereconciliationfrom
IFRS to Dutch GAAP on page 191.
Presentation of nancial statements
The balance sheet presentation deviates from Dutch regulations and
is more in line with common practice in the United States in order to
achieve optimal transparency for Dutch and US shareholders.
Under this format, the order of presentation of assets and liabilities
is based on the degree of liquidity, which is common practice in the
United States.
Notes to the company nancial statements of
Royal Philips Electronics
all amounts in millions of euros unless otherwise stated
ThenancialstatementsofKoninklijkePhilipsElectronicsN.V.
(“Royal Philips Electronics” or the Company), the parent company of
the Philips Group, are included in the consolidated statements of the
Philips Group. Therefore the unconsolidated statements of income
ofRoyalPhilipsElectronicsonlyreectthenetafter-taxincomeof
afliatedcompaniesandotherincomeaftertaxes.
A
Receivables
2004 2005
Trade accounts receivable 204 223
Group companies 7,694 13,205
Unconsolidated companies 2 74
Other receivables 8 13
Advances and prepaid expenses 17 14
Deferred tax assets 69 13
Income tax receivable 5 8
Derivative instruments - assets 520 275
8,519 13,825
An amount of EUR 4 million included in receivables is due after one
year (2004: EUR 50 million).
B
Investments in afliated companies
Theinvestmentsinafliatedcompaniesareincludedinthebalance
sheet based on either their net asset value in conformity with the
aforementionedaccountingprinciplesoftheconsolidatednancial
statements or their purchase price. Moreover, goodwill is included for
an amount of EUR 639 million (2004: EUR 795 million).
investments loans total
Balance as of January 1, 2005 12,526 3,429 15,955
Changes:
Acquisitions/additions 4,811 933 5,744
Sales/redemptions (774) (2,585) (3,359)
After-taxincome(loss)fromafliated
companies:
Impairment losses• (131) −(131)
Remaining income• 2,258 −2,258
Dividends received (710) −(710)
Translation differences/other changes 1,080 337 1,417
Balance as of December 31, 2005 19,060 2,114 21,174
Alistofsubsidiariesandafliatedcompanies,preparedinaccordance
with the relevant legal requirements (The Netherlands Civil Code, Book 2,
Articles379and414),isdepositedattheofceoftheCommercial
Register in Eindhoven, the Netherlands.
Companynancialstatements