Siemens 2013 Annual Report Download - page 271

253 D. Consolidated Financial Statements 357 E. Additional Information
254 D. Consolidated Statements of Income
255 D. Consolidated Statements of Comprehensive Income
256 D. Consolidated Statements of Financial Position
257 D. Consolidated Statements of Cash Flows
258 D. Consolidated Statements of Changes in Equity
260 D. Notes to Consolidated Financial Statements
348 D. Supervisory Board and Managing Board

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 December , the IASB issued amendments to IAS ,
Financial Instruments: Presentation and IFRS , Financial In-
struments: Disclosures regarding offsetting of financial assets
and financial liabilities. The amendment to IAS  clarifies the
existing offsetting rules and is effective for reporting periods
beginning on or after January , , early application is per-
mitted, however it requires the application of the amendments
to IFRS . These amendments to IFRS  expand the disclosure
requirements for financial assets and financial liabilities offset
in the statements of financial position including netting agree-
ments where netting is subject to certain future events. This
amendment is effective for reporting periods beginning on or
after January , . Both amendments were endorsed by the
European Union in December .
IFRS  provides a comprehensive concept of control as the de-
termining factor in whether an entity should be included with-
in the Consolidated Financial Statements. The standard pro-
vides additional guidance to assist in the determination of con-
trol where this is difficult to assess.
IFRS  provides guidance for the accounting of joint arrange-
ments by focusing on the rights and obligations of the ar-
rangement, rather than its legal form.
IFRS  is a new and comprehensive standard on disclosure re-
quirements for all forms of interests in other entities, includ-
ing joint arrangements, associates, structured entities and off
balance sheet vehicles.
IFRS , ,  and the consequential amendments to IAS 
and IAS  are effective for annual periods beginning on or af-
ter January , . These new or amended standards may be
adopted early. The standards are to be applied on a retrospec-
tive basis. In December , IFRS , , , and the conse-
quential amendments to IAS  and IAS  were endorsed by
the European Union. Siemens will adopt IFRS , , , and the
consequential amendments to IAS  and IAS  in fiscal .
The Company does not expect a material impact on its Consoli-
dated Financial Statements from these standards.
In May , the IASB issued IFRS , Fair Value Measurement.
The new standard defines fair value and standardizes disclo-
sures on fair value measurements of both financial and non-fi-
nancial instrument items. The new standard is applicable for
annual periods beginning on or after January , ; early
adoption is permitted. In December , IFRS  was endorsed
by the European Union. Siemens will adopt IFRS  in fiscal
. Regarding financial instruments, the majority of changes
required by IFRS  have already been introduced, mainly by
amendments to IFRS , Financial Instruments: Disclosures. The
Company does not expect a material impact on the Consolidat-
ed Financial Statements upon adopting IFRS .
In November , the IASB issued IFRS , Financial Instru-
ments. This standard is the first phase of the IASB’s three-
phase project to replace IAS , Financial Instruments: Recog-
nition and Measurement. IFRS  amends the classification and
measurement requirements for financial assets, including
some hybrid contracts. It uses a single approach to determine
whether a financial asset is measured at amortized cost or at
fair value, depending on how an entity manages its financial
instruments (its business model) and the contractual cash
flow characteristics of the financial assets. In October ,
most of the requirements for financial liabilities were carried
forward unchanged from IAS  to IFRS . In December ,
IFRS  was amended to not require the restatement of compar-
ative-period financial statements upon initial application, to
require additional disclosures and to defer the mandatory ef-
fective date to annual reporting periods beginning on or after
January , . As part of its current project Classification and
Measurement: Limited Amendments to IFRS , however, the
IASB tentatively decided in July  that the mandatory effec-
tive date should be deferred again and left open depending on
the finalization of the limited amendments and the second
phase of IFRS , Impairment Methodology. Early application
would still be permitted. The European Financial Reporting Ad-
visory Group has postponed its endorsement advice on IFRS 
as currently issued. Due to the ongoing changes to IFRS  by
the IASB the Company ’s assessment of the impacts of adopt-
ing IFRS  on the Company ’s Consolidated Financial State-
ments is still ongoing.
NOTE  Critical accounting estimates
Siemens’ Consolidated Financial Statements are prepared in
accordance with IFRS as issued by the IASB and as adopted by
the EU. Siemens’ significant accounting policies, as described
in NOTE  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES are es-
sential to understanding the Company ’s results of operations,
financial positions and cash flows. Certain of these accounting
policies require critical accounting estimates that involve com-
plex and subjective judgments and the use of assumptions,
some of which may be for matters that are inherently uncer-
tain and susceptible to change. Such critical accounting esti-
mates could change from period to period and have a material
impact on the Company ’s results of operations, financial posi-
tions and cash flows. Critical accounting estimates could also