A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2011, and have consequently not been applied in preparing these consolidated financial statements.
IFRS 7 Amendments “Financial Instruments” (effective for annual periods beginning on or after July 1, 2011).
The Amendments are subject to endorsement by the European Union. The Amendments increase the disclosure requirements for transactions involving transfers of financial assets. These Amendments are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements. Amendments to IAS 32 (effective for annual periods beginning on or after 1 January 2014) and amendments to IFRS 7 (effective for annual periods beginning on or after 1 January 2014) relating to offsetting of financial assets and financial liabilities, as published in December 2011, have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Company’s financial statements.
IFRS 9 “Financial Instruments” (effective for annual periods beginning on or after January 1, 2013).
The Standard is subject to endorsement by the European Union. IFRS 9 addresses the classification and measurement of financial assets and financial liabilities. IFRS 9 enhances the ability of investors and other users of financial information to understand the accounting of financial assets and reduces complexity. Furthermore, IFRS 9 addresses the accounting for changes in the fair value of financial liabilities (designated at fair value through profit or loss) attributable to changes in the credit risk of that liability. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements. IFRS 10 “Consolidated Financial Statements” (effective for annual periods beginning on or after January 1, 2013).
The Standard is subject to endorsement by the European Union. IFRS 10 replaces the parts of IAS 27 “Consolidated and Separate Financial Statements” that deal with consolidated financial statements. Under IFRS 10 there is only one basis of consolidation, being control. In addition, IFRS 10 includes a new definition of control that contains three elements: a) power over an investee, b) exposure, or rights to variable returns from its involvement with the investee, and c) the ability to use power over the investee to affect the amount of the investor’s returns. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements.
IFRS 11 “Joint Arrangements” (effective for annual periods beginning on or after January 1, 2013).
The Standard is subject to endorsement by the European Union. IFRS 11 replaces IAS 31 “Interests in Joint Ventures” and deals with how a joint arrangement of which two or more parties have joint control should be classified. Under IFRS 11, joint ventures are required to be accounted for using the equity method of accounting, whereas under IAS 31, jointly controlled entities can be accounted for using the equity method of accounting or proportionate accounting. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements.
IFRS 12 “Disclosure of Interest in Other Entities” (effective for annual periods beginning on or after January 1, 2013).
The Standard is subject to endorsement by the European Union. IFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements.
IFRS 13 “Fair Value Measurement” (effective for annual periods beginning on or after January 1, 2013).
The Standard is subject to endorsement by the European Union. IFRS 13 defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. The Standard applies to both financial instrument items and non-financial instrument items. Grontmij is currently in the process of determining the impact of adopting this Standard on the Company’s consolidated financial statements.
IAS 1 Amendments “Presentation of Items of Other Comprehensive Income” (effective for annual periods beginning on or after July 1, 2012).
The Amendments are subject to endorsement by the European Union. The Amendments to IAS 1 require additional disclosures to be made in the other comprehensive income section such that items are grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that will be reclassified subsequently to profit or loss when specific conditions are met. Grontmij is currently in the process of determining the impact of adopting these Amendments on the Company’s
IAS 19 Revised “Employee Benefits” (effective for annual periods beginning on or after January 1, 2013).
This Revised standard is subject to endorsement by the European Union. The most significant amendments to IAS 19 relate to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Further, the amendments enhance the disclosure requirements for an employer’s participation in a multiemployer plan. Grontmij is currently in the process of determining the impact of adopting this Revised Standard on the Company’s consolidated financial statements.
4 Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value.
Property, plant and equipment
The fair value of property, plant and equipment recognised in the course of a business combination is based on market values. The market value of real estate is the value for which the asset on the valuation date can be sold in a businesslike, arm’s length transaction, as estimated by a third party. The market value of other property, plant and equipment is based on market prices of comparable assets.
Intangible assets
Trade names
The fair value of trade names acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the trade name being owned. The determination of the fair value is based on reasonable assumptions and estimations of the economic situation during the lifetime of the asset.
Order backlogs
The fair value of order backlogs acquired in a business combination is based on the future economic benefits associated with the order backlog that are due to the Group. The determination of the fair value is based on reasonable assumptions and estimations of the economic situation during the lifetime of the asset.
Customer relations
The fair value of customers relations acquired in a business combination is based on the sales that are attributable to customer relationships and their associated attrition rates at the date of acquisition and the future economic benefits associated with the customer relationship that are due to the Group. The determination of the fair value is based on reasonable assumptions and estimations of the economic situation during the lifetime of the asset.