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ePaper created 2015-05-08, 10:57:20 | version 1.38.0
SHOPPING68 ANNUAL REPORT 2014Deutsche EuroShop FINANCIAL STATEMENTS Basis of consolidation and consolidation methods Basis of consolidation Subsidiaries The consolidated financial statements include all subsidiaries in which Deutsche EuroShop AG directly or indirectly holds a majority of voting rights. As at 31 December 2014, the basis of consolidation comprised, in addition to the parent company, twelve (previous year: twelve) fully consolidated domestic and foreign subsidiaries. Deutsche EuroShop AG holds a stake of 52.01% in Main-Tau- nus-Zentrum KG, Hamburg and exercises a controlling influ- ence over the company. The other 47.99% of shares are in free float. The Company posted non-current assets of €547,590 thousand (previous year: €528,490 thousand) and current as- sets of €14,804 thousand (previous year: €15,956 thousand) at the balance sheet date. Non-current liability items amounted to €220,000 thousand (previous year: €220,000) and current liability items totalled €4,573 thousand (previous year €5,046 thousand). The Company generated revenue of €34,110 thou- sand (previous year: €33,646 thousand) and profit of €22,033 thousand (previous year: €16,630 thousand). A dividend of €11,490 thousand (previous year: €9,604 thousand) was paid to limited partners in the year under review. Joint ventures Joint ventures in which Deutsche EuroShop AG has a majority of the voting rights together with third parties are classified as joint operations and accounted for using the equity method. Six companies fall into this category as at the balance sheet date. We refer here to the notes in the “Changes in accounting and valua- tionmethods”.DeutscheEuroShopAGhasa75%stakeinStadt- Galerie Passau KG, Hamburg. It does not hold the majority of voting rights based on corporate agreements. Associates In accordance with IAS 28, where Deutsche EuroShop AG can exercise a significant influence but not control over companies, these investments are measured using the equity method. This applied to five companies at the balance sheet date. Investees Investments over which Deutsche EuroShop AG has neither significant influence nor control are measured at fair value, in line with the provisions of IAS 39. This relates to the stake in Ilwro Holding B.V., Amsterdam. Consolidation methods For purchase accounting, the cost is eliminated against the par- entcompany’sinterestinthere-valuedequityofthesubsidiaries at the date of acquisition or initial consolidation. Any remaining excess of identified net assets acquired over cost of acquisition is recognised as goodwill in intangible assets. Any excess of iden- tified net assets acquired over cost of acquisition is recognised in income following a further reassessment. Joint ventures and associates are measured using the equity method.Thecostofacquiringinvestmentisrecognisedhereinin- comeatanamountincreasedorreducedbythechangesinequity corresponding to the equity interest of Deutsche EuroShop AG. Intragrouptransactionsareeliminatedaspartoftheconsolidation of intercompany balances and of income and expenses. Currency translation The Group currency is the euro (€). The companies located outside the eurozone that are included in the consolidated financial statements are treated as legally in- dependent, but economically dependent, integrated companies. The reporting currency of this company (Polish zloty) therefore deviates from the functional currency (euro). Under IAS 21, annual financial statements prepared in foreign currencies are translated using the functional currency method, with the result that the balance sheet is to be translated as if the transactions had arisen for the Group itself, as the local currency of the inte- grated companies is deemed to be a foreign currency for these companies themselves. Monetary values are therefore translated at the closing rate and non-monetary items at the rate that applied at the time of initial recognition. Non-monetary items to be reported at fair value are translated at the closing rate. Items in the consolidated income statement are translated at average rates for the year or, in the event of strong fluctuations, using the rate that applied on the date of the transaction. Any translation differences that may arise if the translation rates of the balance sheet and consoli- dated income statement differ are recognised in profit or loss. A closing rate of HUF 314.89 (previous year: HUF 296.91) and an average rate of HUF 308.66 (previous year: HUF 296.92) were used in the translation of the separate Hungarian financial statements for Einkaufs-Center Arkaden Pécs KG, Hamburg, from forint to euros. A closing rate of PLN 4.2623 (previous year: PLN 4.1472) and an average rate of PLN 4.1843 (previ- ous year: PLN 4.1975) were taken as a basis for translating the separate financial statements of the Polish property company. Reporting principles The following new or amended standards and interpretations are required to be applied for the first time to the financial years ending on 31 December 2014: 1. IFRS 10 Consolidated Financial Statements 2. IFRS 11 Joint Arrangements 3. IFRS 12 Disclosures of Interests in Other Entities 4. IAS 27 Separate Financial Statements 5. IAS 28 Investments in Associates and Joint Ventures 6. Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) 7. Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39) 8. Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities: Transitional guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) 9. Investment companies (Amendments to IFRS 10, IFRS 12 and IAS 27) 10. Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) IFRS 10 Consolidated Financial Statements (since 1 January 2014) IFRS 10 replaces the consolidation rules of IAS 27. However, IAS 27 is not eliminated without replacement. In the future, its application will be limited to accounting for subsidiaries, associates and joint ventures in the parent company’s separate financial statements. IFRS 10 now includes the aspects of full consolidation that were previously regulated generally in IAS 27 and in SIC 12 for spe- cial purpose entities. IFRS 10 also contains a uniform consoli- dation concept. A parent-subsidiary relationship is determined on the basis of the criteria power and variability in returns and the link between them. IFRS 11 Joint Arrangements (since 1 January 2014) IFRS 11 outlines accounting for interests in a joint venture or joint operation. IFRS 11 replaces IAS 31 and SIC 13. As a result of the revised definitions, there are now only two types of joint arrangements: joint operations and joint ventures. Jointly con- trolled assets (IAS 31) are now classified as jointly controlled operations. The previous right to opt for proportional consolidation stipu- lated in IAS 31 was discontinued for jointly controlled entities. Instead the equity method must be used in the consolidated financial statements for joint arrangements classified as joint ventures. In addition, joint operations will continue to be ac- counted for proportionally in the separate and consolidated financial statements of the parent company. IFRS 12 Disclosures of Interests in Other Entities (since 1 January 2014) IFRS 12 replaces the previous rules for notes to the financial statements in IAS 27, IAS 28, IAS 31 and SIC 12. The standard uniformly regulates the disclosure requirements for all types of interests in other companies. Companies are required to disclose information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in subsidiaries, associates, joint ar- rangements and unconsolidated structured companies and the effects of those interests on financial position. IAS 27 Separate Financial Statements (since 1 January 2014) IAS 27 was amended as a result of the new standards for the consolidation package (IFRS 10, IFRS 11). Thanks to the publi- cation of the new IFRS 10, IAS 27 now only includes guidelines for accounting and notes to the financial statements of subsidiar- ies, joint ventures and associates in the IFRS separate financial statements. IAS 28 Investments in Associates and Joint Ventures (since 1 January 2014) As a result of changes to the standards in the consolidation basis, IAS 28 was also amended. The differences between the revised version and the previous version of IAS 28 are less related to content and more editorial in nature. The rules for applying the equity method are outlined in IAS 28. Under the equity meth- od, the investment is initially recognised at cost, and the carry- ing amount is increased or decreased to recognise the investor’s share of the profit or loss after the date of acquisition. An associate is defined based on the concept of “significant in- fluence”, which requires power to participate in financial and operating policy decisions of an investee. Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) (since 1 January 2014) The changes can be attributed to a consequential amendment to IAS 36 with publication of IFRS 13. Some of the disclosure rules in IAS 36 became too broad with the introduction of IFRS 13. It would require disclosure of the recoverable amount of any cash-generating unit with a significant carrying amount of good- will or intangible assets with indefinite useful lives regardless of whether an impairment was recognised. In contrast, how- ever, the changes only stipulate a disclosure requirement when an impairment was also actually reported in the financial year. In addition, the changes contain clarifications and additions to disclosure requirements for impaired assets whose recoverable amount was determined on the basis of their fair value less costs of disposal. Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39) (since 1 January 2014) The changes aim to prevent hedge accounting from being af- fected when derecognising derivatives necessary as a result of the novation. The changes to IAS 39 mean that in the event of a novation, derivatives continue to be designated hedging instru- ments in existing hedging relationships if certain requirements are cumulatively satisfied. Consolidated Financial Statements, Joint Arrangements and Disclosures of Interests in Other Entities:Transitional guidance (Amendment to IFRS 10, IFRS 11 and IFRS 12) (since 1 January 2014) The amendments clarify first-time application of IFRS 10 and provide additional relief in all standards of the consolidation package. In addition, the requirement to provide comparative information for periods prior to the immediately preceding pe- riod was eliminated due to retroactive application. Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (since 1 January 2014) The amendments to IFRS 10, IFRS 12 and IAS 27 help clarify how an investment entity is defined. In addition, a parent com- pany which is an investment entity is required to measure its in- vestments in individual subsidiaries at fair value through profit or loss in the consolidated and separate financial statements. The changes also include the notes required to the financial state- ments for investment entities in IFRS 12 and the amended IAS 27.