Philips 2008 Annual Report Download - page 233

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Pensions and postretirement benefits other than pensions
Change in accounting policy
As a result of the change in the pension accounting policy by adopting the option available under IAS 19 paragraph 93A, previously unrecognized
actuarial gains and losses are recognized in full and recorded in the Statement of recognized income and expenses (Sorie). IFRIC 14, which was
early adopted on January 1, 2008, clarified the extent to which a defined-benefit asset could be recognized in the financial statements. The
combined impact of these two changes in accounting policy at January 1, 2006, reduced the overall net pension liability recognized in the financial
statements by EUR 1,216 million (pre-tax). The financial quantification of this change is disclosed in the following table:
Change in accounting policy - Balance sheet impact
in millions of euros
previous policy
effect of accounting
policy changes new policy
January 1, 2006
Prepaid pension costs under non-current assets 95 1,559 1,654
Accrued pension costs under non-current liabilities (687) (248) (935)
Provision for pensions under non-current provisions (703) (126) (829)
Provision for other post retirement benefits under non-current provisions (446) 31 (415)
Deferred income tax asset 2,123 45 2,168
Deferred income tax liabilities (274)1) (400) (674)
Stockholders’ equity 16,2871) 862 17,149
December 31, 2006
Prepaid pension costs under non-current assets 343 1,823 2,166
Accrued pension costs under non-current liabilities (298) (127) (425)
Provision for pensions under non-current provisions (677) (115) (792)
Provision for other post retirement benefits under non-current provisions (372) 35 (337)
Deferred income tax asset 1,449 37 1,486
Deferred income tax liabilities (251)1) (430) (681)
Stockholders’ equity 21,8761) 1,223 23,099
December 31, 2007
Prepaid pension costs under non-current assets 331 2,227 2,558
Accrued pension costs under non-current liabilities (261) (98) (359)
Provision for pensions under non-current provisions (676) (74) (750)
Provision for other post retirement benefits under non-current provisions (364) (32) (396)
Deferred income tax asset 1,271 −1,271
Deferred income tax liabilities (126)1) (526) (652)
Stockholders’ equity 20,2451) 1,496 21,741
Change in accounting policy - Income statement impact
in millions of euros
previous policy
effect of
accounting
policy changes new policy
December 31, 2006
Cost of sales (18,451)1) 49 (18,402)
Selling expenses (4,679) 19 (4,660)
General and administrative expenses (1,174) 267 (907)
Research and development expenses (1,603) 47 (1,556)
Discontinued operations 4,010 144 4,154
Income tax expense (188)1) (35) (223)
Net income 4,662 491 5,153
December 31, 2007
Cost of sales (17,689)1) 21 (17,668)
Selling expenses (4,985) 10 (4,975)
General and administrative expenses (1,124) 338 (786)
Research and development expenses (1,617) 16 (1,601)
Discontinued operations (73) (65) (138)
Income tax expense (488)1) (94) (582)
Net income 4,647 226 4,873
Prior-period amounts have been revised to reflect immaterial adjustments of intercompany profit elimination on inventory (see Significant accounting policies,
1)
Reclassifications and revisions).
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Philips Annual Report 2008 233
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information