IFRS 10 Consolidated Financial Statements
IFRS 10 introduces a single definition of control for all entities, creating a standardised basis for determining whether a par- ent-subsidiary relationship exists and the associated inclusion in the basis of consolidation. The standard provides compre- hensive application guidance on determining whether a con- trol relationship exists. The new standard fully replaces IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation — Special Purpose Entities.
In the course of initial application of IFRS 10 Consolidated Fi- nancial Statements, the Group reassessed the control rela- tionship regarding the equity interest in TT OFF SALE (NI) LTD. and its subsidiary TT OFF SALE (Ireland) LTD., which have been accounted for using the equity method to date. The definition of control is broader in IFRS 10 than in IAS 27. In addition to adding rights to be considered, a more economic approach is applied. The control of entities is no longer determined solely based on the ability to determine financial and business policy with voting rights, but instead now comprises all substantive rights with which the relevant business activities of the entity being considered for consolidation can be directed. Such spe- cial rights exist in the relationship between TOM TAILOR and TT OFF SALE (NI) LTD. This means that TOM TAILOR has control over this entity and its subsidiary. In principle, these two com- panies must therefore be included in full in the consolidated financial statements, but they are not consolidated due their insignificance to the Group’s net assets, financial position and results of operations.
IFRS 11 Joint Arrangements
IFRS 11 applies to circumstances where an entity jointly con- trols a joint venture or a joint operation. In future, joint ven- tures must be accounted for using the equity method. The previously applicable alternative of proportionate consolida- tion is no longer permitted. The new standard replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Enti- ties — Non-Monetary Contributions by Venturers.
a) Changes applicable in 2014
The TOM TAILOR GROUP applied the following new or amend- ed standards and interpretations in financial year 2014:
New Regulations and Amendments in Financial Reporting Effective date Date of EU endorse- ment New standards/interpretations IFRS 10:
Consolidated Financial Statements 01/01/2014 11/12/2012 IFRS 11: Joint arrangements 01/01/2014 11/12/2012 IFRS 12: Disclosure of Interests in Other Entities 01/01/2014 11/12/2012 IAS 27:
Separate Financial Statements
(revised 2011) 01/01/2014 11/12/2012
IAS 28:
Investments in Associates and
Joint Ventures (revised 2011) 01/01/2014 11/12/2012 Amendments to standards
Amendments to IFRS 10, 11 and 12: Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests
in Other Entities Transition Guidance 01/01/2014 04/04/2013 Amendments to IFRS 10, 11 and 12:
Separate Financial Statements — Exemption from Consolidation for
Investment Entities 01/01/2014 20/11/2013
Amendment to IAS 32:
Financial Instruments: Presentation — Offsetting Financial Assets and
Financial Liabilities 01/01/2014 13/12/2012
Amendment to IAS 36
Recoverable Amount Disclosures for
Non-Financial Assets 01/01/2014 19/12/2013
Amendments to IAS 39/IFRS 9:
Novation of Derivatives and Continuation
of Hedge Accounting 01/01/2014 19/12/2013
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 combines in a single standard all of the disclosure re- quirements that an entity with shares or an interest in other entities must meet; these include interests in subsidiaries, as- sociates, joint arrangements and unconsolidated structured entities. The new standard replaces the existing disclosure requirements in IAS 27, IAS 28, IAS 31 and SIC-12.
IAS 27: Separate Financial Statements (revised 2011)
The new rules included in IFRS 10 Consolidated Financial Statements replaced the consolidation guidelines contained to date in IAS 27 Consolidated and Separate Financial State- ments and SIC-12 Consolidation — Special Purpose Entities. Since IAS 27 now only contains the rules applicable to sepa- rate financial statements, the standard was renamed IAS 27 Separate Financial Statements (revised 2011).
IAS 28: Investments in Associates and Joint Ventures (revised 2011)
The amended IAS 28 specifies how to account for investments in associates and how to apply the equity method when ac- counting for investments in associates and joint ventures.
Amendment to IFRS 10, IFRS 11 and IFRS 12: Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities — Transition Guidance
These amendments provide for additional relief when apply- ing IFRS 10, IFRS 11 and IFRS 12 for the first time.
Amendments to IFRS 10, 11 and 12: Separate Financial Statements — Exemption from Consolidation for Investment Entities
To be considered an investment entity, a company must sat- isfy three criteria and possess four further typical char- acteristics. An investment entity does not consolidate its subsidiaries, unless the subsidiary solely provides services related to investment activities. Investment entities are required to account for their subsidiaries at fair value through profit or loss in accordance with IFRS 9 (and IAS 39). TOM TAILOR Holding AG is not classified as an investment entity.
Amendment to IAS 32: Financial Instruments: Presentation — Offsetting Financial Assets and Financial Liabilities
The IASB has issued an amendment to the application guid- ance contained in IAS 32 Financial Instruments: Presentation to clarify certain requirements regarding the offsetting of fi- nancial assets and financial liabilities in the balance sheet. The amendments leave the current offsetting model under IAS 32 in principle unchanged.
Amendments to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets
The amendments issued by the IASB provide for minor adjust- ments to IAS 36 Impairment of Assets. The amendments rec- tify the requirement to disclose the recoverable amount of each cash-generating unit to which a significant amount of goodwill or indefinite-lived intangible assets have been al- located, which was introduced to IAS 36 by IFRS 13 Fair Value Measurement. The IASB’s original intention was to require such disclosures only for cash-generating units for which an impairment loss or reversal of an impairment loss has been recognised in the reporting period. The amendments address the problem that made the disclosure requirements under IAS 36 broader than intended. The amendments also introduce new dis closure requirements if the recoverable amount of an asset or cash-generating unit for which an impairment loss has been recognised or reversed has been determined based on fair value less costs of disposal (e. g. description of the valuation technique used to measure fair value, disclosure of all key assumptions used in the measurement).
b) Standards, interpretations and amendments to published standards approved by the IASB, but not yet applicable nor adopted by the EU as at 31 December 2014
In financial year 2014, the TOM TAILOR GROUP did not apply the following new or amended accounting standards that have already been approved by the IASB, as they were not yet required to be applied:
Future New Regulations and Amendments in Financial Reporting Effective date Date of EU endorse- ment New standards/interpretations IFRS 9: Financial Instruments 01/01/2018 H2 2015 IFRS 14:
Regulatory Deferral Accounts 01/01/2016 Q2 2015 IFRS 15:
Revenue from Contracts with Customers 01/01/2017 Q2 2015 Amendments to standards
Amendment to IFRS 10, IFRS 12, IAS 28
Applying the Consolidation Exception 01/01/2016 Q4 2015 Amendment to IAS 1:
Disclosure Initiative 01/01/2016 Q4 2015
Amendment to IFRS 10, IAS 28:
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture 01/01/2016 Q4 2015 Amendment to IAS 27:
Equity Method in Separate Financial
Statements 01/01/2016 Q3 2015
Amendment to IAS 16, IAS 38: Clarification of Acceptable Methods
of Depreciation and Amortisation 01/01/2016 Q1 2015 Amendment to IAS 19
Employee Contributions 01/07/2014 17/12/2014 Amendment to IFRS 11:
Accounting for Acquisitions of Interests
in Joint Operations 01/01/2016 Q1 2015
Amendments to IAS 39/IFRS 9: Novation of Derivatives and Continuation of Hedge Accounting
In response to the new derivatives trading rules under the European Market Infrastructure Regulation (EMIR) introduced due to the tougher regulation of the derivative market world- wide, the IASB published narrow scope amendments to IFRS 9 and IAS 39 on the recognition of financial instruments. Pre- viously, novation to a central counterparty required the dis- continuation of hedging relationships if a derivative was the hedging instrument. The amendments provide for the con- tinuation of the original hedging relationship subject to cer- tain conditions and is intended to help avoid ineffectiveness for cash flow hedges. Novation to a counterparty must hap- pen as a consequence of laws or regulations. In addition, any changes to the contract terms must be limited to those are- as that are required for the novation; following the novation, the central counterparty must become the new counterparty to each of the parties to the derivative.
IASB Annual Improvements Project 2009-2011
In June 2011, the IASB issued its fourth round of annual im- provements an exposure draft of proposed amendments to five IFRSs. The amendments are intended to eliminate ambi- guities in existing IFRSs. The following areas have been clari- fied: requirements regarding voluntary comparative informa- tion (IAS 1), classification of servicing equipment as inventory or as property, plant and equipment (IAS 16), income tax im- plications of distributions to holders of an equity instrument and transaction costs of an equity transaction (IAS 32 and IAS 12), and disclosure of segment information in an interim report (IAS 34).
Other than the additional disclosures, the new accounting re- quirements do not affect or have no material effect on the presentation of the Group’s net assets, financial position and results of operations.
— TOM TAILOR RETAIL RO SRL, Bucharest/Romania — BONITA Deutschland Holding Verwaltungs GmbH,
Hamminkeln/Germany
— BONITA E-commerce GmbH, Oststeinbek/Germany — GEWIB GmbH, Hamminkeln/Germany
— GEWIB GmbH & Co. KG, Pullach/Germany — BONITA SAS, Paris/France
— BONITA (Schweiz) Retail AG, Baar/Switzerland — BONITA ITALIA S.R.L. UNIPERSONALE, Verona/Italy — BONITA Österreich Handels GmbH, Salzburg/Austria
Indirect equity interests
— TT OFF SALE (NI) LTD., Belfast/United Kingdom — TT OFF SALE (Ireland) LTD., Dublin/Ireland
All subsidiaries are wholly owned by the parent company with the exception of TOM TAILOR South Eastern Europe Holding GmbH and its subsidiaries, TOM TAILOR Sourcing Ltd., as well as TOM TAILOR RETAIL RO SRL.
TT OFF SALE (NI) LTD., Belfast/United Kingdom, was formed in financial year 2008. As a founding shareholder, Tom Tailor GmbH holds 49.0% of the shares in TT OFF SALE (NI) LTD. and its wholly owned subsidiary, TT OFF SALE (Ireland) LTD., Dublin/ Ireland.
The interest in TT OFF SALE (NI) LTD. and its subsidiary TT OFF SALE (Ireland) LTD. have not been included in the consolidated financial statements because they are insignificant. For more details please see section A “General Information — Basis of Preparation” and section D “12. Financial Assets”.
On 27 March 2014, the TOM TAILOR GROUP increased its in- terest in TOM TAILOR Retail Joint Venture GmbH domiciled in Bregenz/Austria and its subsidiaries TT RETAIL GmbH, Lindau/ Germany, and TT Franchise AG, Buchs/Switzerland, from 51% to 100%. These companies were consolidated without re- porting non-controlling interests from the outset due to the existing put/call options. The total purchase price, which has been paid and was financed through bank loans, amounts to EUR 3.9 million.
Provided they are adopted by the EU in their current form, the Group does not currently expect the new accounting pro- nouncements to have a material effect on the presentation of its net assets, financial position or results of operations.