Siemens 2009 Annual Report Download - page 224

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 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
 Consolidated Statements of Income  Consolidated Statements of Income
and Expense Recognized in Equity
 Consolidated Balance Sheets  Consolidated Statements of Cash Flow
Recently adopted accounting pronouncements
In January 2008, the IASB issued an amendment to IFRS 2,
Share-based Payment, Vesting Conditions and Cancellations.
The amendment clarifies that vesting conditions are service
conditions and performance conditions only. Other features of
a share-based payment are not vesting conditions. It also
specifies that all cancellations, whether by the entity or by
other parties, should receive the same accounting treatment.
The amended IFRS 2 is effective for annual periods beginning
on or after January 1, 2009 and has been applied to relevant
programs starting in fiscal 2009.
In March 2009, the IASB issued Improving Disclosures about
Financial Instruments (Amendments to IFRS 7 Financial Instru-
ments: Disclosures) which enhances disclosures about fair
value measurements of Financial Instruments. A three-level
fair value disclosure hierarchy is introduced, that distinguishes
fair value measurements by the significance of the inputs used
and reflects the availability of observable market inputs when
estimating fair values. Amendments are also made to enhance
disclosures on liquidity risks, by clarifying the scope of liabili-
ties to be disclosed in a maturity analysis. Siemens decided to
early adopt the amendment in its current 2009 Consolidated
Financial Statements.
Recent accounting pronouncements, not yet adopted
The following pronouncements, issued by the IASB, are not yet
effective and have not yet been adopted by the Company:
In September 2007, the International Accounting Standards
Board (IASB) issued IAS 1, Presentation of Financial State-
ments: A Revised Presentation (IAS 1 revised). IAS 1 revised re-
places IAS 1, Presentation of Financial Statements (revised in
2003), as amended in 2005. The revision is aimed at improving
users’ ability to analyze and compare the information given in
financial statements. IAS 1 revised sets overall requirements
for the presentation of financial statements, guidelines for
their structure and minimum requirements for their content.
The new standard is effective for fiscal periods beginning on or
after January 1, 2009.
hedged item, the subsequent cumulative change in its fair
value is recognized as a separate financial asset or liability with
corresponding gain or loss recognized in net income.
For hedged items carried at amortized cost, the adjustment is
amortized such that it is fully amortized by maturity of the
hedged item. For hedged firm commitments the initial carry-
ing amount of the assets or liabilities that result from meeting
the firm commitments are adjusted to include the cumulative
changes in the fair value that were previously recognized as
separate financial assets or liabilities.
Cash flow hedges – The effective portion of changes in the
fair value of derivative instruments designated as cash flow
hedges are recognized in Other components of equity, net of
applicable deferred income taxes, and any ineffective portion
is recognized immediately in net income. Amounts accumu-
lated in equity are reclassified into net income in the same pe-
riods in which the hedged item affects net income (see Note 32
for further information).
Share-based payment – IFRS 2 distinguishes between cash-
settled and equity-settled share-based payment transactions.
For both types, the fair value is measured at grant date and the
compensation expense is allocated over the period during
which the employees become unconditionally entitled to the
awards. Cash-settled awards are re-measured at fair value on
each reporting date until the award is settled. Siemens uses an
option pricing model to determine the fair value of stock op-
tions. The fair value of other share-based payment instru-
ments, such as stock awards, matching shares and shares
granted under the Jubilee Share Program, is determined as the
market price of Siemens shares, considering dividend pay-
ments during the vesting period the grantees are not entitled
to and certain non-vesting conditions, if applicable. See Note
34 for further information on share-based payment transac-
tions.
Prior year information – The presentation of certain prior year
information has been reclassified to conform to the current
year presentation.