Philips 2006 Annual Report Download - page 220

Philips Annual Report 2006220
As from 2005, Dutch law allows companies that apply IFRS as adopted
by the European Union in their consolidated fi nancial statements to use
the same accounting principles in the Company fi nancial statements.
Company fi nancial statements that are based on this provision qualify
as fi nancial statements under Dutch law.
The fi nancial statements of Koninklijke Philips Electronics N.V.
(the ‘Company’ or ‘Philips’) included in this section are prepared in
accordance with IFRS accounting principles as used in the consolidated
fi nancial statements, in order to maintain the consistency between
the fi gures in the consolidated fi nancial statements and the fi nancial
statements of the Company. The same basis as applied for the
Company has also been applied for the affi liated companies.
The accounting principles are explained in the section IRFS accounting
policies of the chapter IFRS information of this Annual Report.
Presentation of Company fi nancial statements
The balance sheet presentation deviates from Dutch regulations and
is more in line with common practice in the US 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 decreasing degree of liquidity, which is common
practice in the US.
The income statement has been prepared in accordance with
Section 402, Book 2, Dutch Civil Code, which allows a simplifi ed
income statement in the Company fi nancial statements in the
event a comprehensive income statement is included in the
consolidated statements.
A
Receivables
2005 2006
Trade accounts receivable 223 138
Affi liated companies 13,279 14,017
Other receivables 13 14
Advances and prepaid expenses 14 37
Deferred tax assets 13 53
Income tax receivable 8 2
Derivative instruments - assets 275 381
13,825 14,642
An amount of EUR 53 million included in receivables is due after
one year (2005: EUR 4 million).
B
Other current assets
In July 2006, Philips transferred the TSMC shares related to the received
stock dividend in 2006 from available-for-sale to trading securities.
These shares are intended to be sold after the expiration of the
lock-up period.
C
Investments in affi liated companies
The investments in affi liated companies are included in the balance
sheet based on either their net asset value in accordance with the
aforementioned accounting principles of the consolidated fi nancial
statements or at amortized cost.
equity
invest-
ments loans total
Balance as of January 1, 2006 19,210 2,114 21,324
Changes:
Acquisitions/additions 1,786 321 2,107
Sales/redemptions (179 ) (807 ) (986 )
Transfer to other non-current
fi nancial assets (2,103 ) (2,103 )
After-tax income from
affi liated companies 231 − 231
Dividends received (2,585 ) (2,585 )
Translation differences/other changes (633 ) (257 ) (890 )
Balance as of December 31, 2006 15,727 1,371 17,098
In January 2006, Philips’ infl uence on TSMC’s operating and fi nancial
policies including representation on the TSMC Board, was reduced.
Consequently, the 16.4% investment in TSMC was transferred from
investments in affi liated companies to available-for-sale securities
effective January 1, 2006, as Philips was no longer able to exercise
signifi cant infl uence. Philips ceased to apply equity accounting for
its TSMC shares as of that date.
A list of subsidiaries and affi liated companies, prepared in accordance
with the relevant legal requirements (Dutch Civil Code, Book 2,
Sections 379 and 414), is deposited at the offi ce of the Commercial
Register in Eindhoven, Netherlands.
Accounting policies applied for Dutch
law purposes
Notes to the company fi nancial statements
all amounts in millions of euros unless otherwise stated
112 Group fi nancial statements 172 IFRS information 218 Company fi nancial statements
- Accounting policies
- Notes to the company
fi nancial statements