Philips 2006 Annual Report Download - page 148
Download and view the complete annual report
Please find page 148 of the 2006 Philips annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Philips Annual Report 2006148
20
Pensions
Employee pension plans have been established in many countries in accordance with the legal requirements, customs
and the local situation in the countries involved. The majority of employees in Europe and North America are covered
by defi ned-benefi t pension plans. The benefi ts provided by these plans are based on employees’ years of service and
compensation levels. The measurement date for all defi ned-benefi t pension plans is December 31.
Contributions are made by the Company, as necessary, to provide assets suffi cient to meet the benefi ts payable
to defi ned-benefi t pension plan participants. These contributions are determined based upon various factors, including
funded status, legal and tax considerations as well as local customs.
In September 2006, SFAS No. 158 was issued. This statement requires an employer to recognize the funded status
of a benefi t plan - measured as the difference between plan assets at fair value and the benefi t obligation in the
balance sheet. The offset of recognizing the funded status is recorded in accumulated other comprehensive income
(within stockholders’ equity). Additionally, the additional
minimum pension liability and related intangible assets are
derecognized
upon adoption of this standard. The following table summarizes the effect of the adoption of SFAS
No. 158. , effective December 31, 2006.
Incremental effect of applying FASB Statement No. 158 on individual line items in the statement of fi nancial position
(pensions and other post retirement benefi ts)
before
application of
Statement 158
additional
minimum pension
liability SFAS No. 158
after
application of
Statement 158
Prepaid pension costs under other non-current assets 2,758 4 (500 ) 2,262
Accrued pension costs under other non-current liabilities (344 ) 412 (510 ) (442 )
Provisions for pensions under provisions (868 ) 142 (152 ) (878 )
Postretirement benefi ts other than pensions (299 ) (74 ) (373 )
Deferred tax assets (non-current) 902 (198 ) 440 1,144
Deferred tax liabilities grouped under provisions (non-current) (496 ) − (12 ) (508 )
Pension related intangible assets 29 (29 ) − −
Total assets 38,780 (223 ) (60 ) 38,497
Total liabilities and equity (38,780 ) 223 60 (38,497 )
Accumulated in other comprehensive income (2,084 ) (331 ) 808 (1,607 )
Total stockholders’ equity (23,474 ) (331 ) 808 (22,997 )
The Company funds certain defi ned-benefi t pension plans as claims are incurred. The projected benefi t obligation,
accumulated benefi t obligation and fair value of plan assets for both funded and unfunded defi ned-benefi t pension
plans with accumulated benefi t obligations in excess of plan assets are included in the table below:
2005 2006
Projected benefi t obligation 7,030 3,791
Accumulated benefi t obligation 6,669 3,600
Fair value of plan assets 5,036 2,543
112 Group fi nancial statements
Notes to the group fi nancial statements
172 IFRS information 218 Company fi nancial statements