Siemens 2006 Annual Report Download - page 244

International Financial Reporting Standards
(in millions of €)
240
1Introduction
According to the Regulation of the European Parliament and Council on the application of
International Financial Reporting Standards (IFRS), publicly traded European Union (EU)
companies are required to prepare their Consolidated Financial Statements in accordance with
IFRS for fiscal years commencing on or after January 1, 2005. However, Member States may
defer mandatory application of IFRS until 2007 for companies that either list debt securities
only or which apply internationally accepted standards other than IFRS due to a listing outside
the EU. The latter particularly applies to companies listed on the New York Stock Exchange
(such as Siemens), which prepare their Consolidated Financial Statements under United States
Generally Accepted Accounting Principles (U.S. GAAP). In Germany, the Bilanzrechtsreform-
gesetz (BilReG), issued in October 2004, implemented the option to defer mandatory IFRS
application.
Accordingly, Siemens’ financial reporting for fiscal year 2006 remains based on U.S. GAAP,
including the Consolidated Financial Statements prepared under U.S. GAAP to meet the legal
requirements of the German Commercial Code (HGB) and the reporting requirements of the
U.S. Securities and Exchange Commission (SEC) on Form 20-F. In addition, Siemens has pre-
pared its first IFRS Consolidated Financial Statements as of and for the two years ended Sep-
tember 30, 2006, which represents the first IFRS reporting date in accordance with IFRS 1,
First-time Adoption of International Financial Reporting Standards. Accordingly, Siemens’
opening IFRS balance sheet is as of October 1, 2004.
As supplemental information, the following unaudited reconciliation of equity and net
income from U.S. GAAP to IFRS provides a brief overview regarding the key impact of Siemens’
conversion from U.S. GAAP to IFRS. We expect to publish on our website the full set of Siemens’
first IFRS Consolidated Financial Statements as of and for the two years ended September 30,
2006 on or about December 18, 2006. These financial statements serve as a basis for Siemens’
primary IFRS reporting beginning with the first quarter of fiscal 2007.
The IFRS Consolidated Financial Statements referred to above have been prepared in accor-
dance with IFRS and its interpretations issued by the International Accounting Standards
Board (IASB), as adopted by the EU. The unaudited reconciliation of equity and net income
from U.S. GAAP to IFRS provided below represents an extract from these full IFRS Consolidated
Financial Statements and therefore is based on the same principles. Siemens has applied all
standards and interpretations that were effective as of September 30, 2006. In addition, the
Company early adopted certain other standards, amendments to standards and interpreta-
tions.