4 New developments in international accounting under IFRS

The following standards, changes to standards and interpretations are required to be applied on or after 1 January 2008:

On 13 October 2008, the IASB published amendments to IAS 39 (Financial Instruments: Recognition and Measurement) and to IFRS 7 (Financial Instruments: Disclosures) to reflect current developments in the financial markets. As a result of the amendments, it is now possible, subject to certain conditions, to reclassify financial assets at fair value through profit or loss to other categories. Furthermore, financial assets in the available-for-sale category may also be reclassified as loans and receivables in future, subject to certain conditions. These amendments were adopted into European law by the Commission of the European Communities by way of Commission Regulation (EC) No. 1004/2008 dated 15 October 2008 and entered into effect on 17 October 2008. The Deutsche Postbank Group has made use of these amendments. Further details can be found in Note 38. 

New accounting pronouncements adopted by the European Union

IFRS 8 (Operating Segments), which supersedes the existing IAS 14 (Segment Reporting), contains new provisions relating to the presentation of segment reporting. IFRS 8 requires segment reporting to be based on the management approach. Under this approach, the definition of the segments and the disclosures for each segment are based on the information used internally by management for the purposes of allocating resources to the components of the entity and assessing their performance. Application of IFRS 8 is mandatory for periods beginning on or after 1 January 2009. The first-time application of IFRS 8 is not expected to have any significant effects on the consolidated financial statements.

IAS 23 (Borrowing Costs), which was revised in 2007, requires borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets to be capitalised. The existing option to recognise borrowing costs immediately as an expense will no longer be available. Application of IAS 23 (as revised in 2007) is mandatory for financial years beginning on or after 1 January 2009. Application of the new provisions will have no significant effects on the consolidated financial statements.

In January 2008, the IASB issued a revision of IFRS 2 (Sharebased Payment). The revision clarifies that vesting conditions are service conditions and performance conditions only. Cancellations of the payment plan (annulment) should receive the same accounting treatment irrespective of whether the payment plan is cancelled by the entity or by another party. Previously, IFRS 2.28 applied explicitly only to cancellations by the entity. Application of the revision is mandatory from 1 January 2009. The first-time application of the revised Standard will have no significant effects on the consolidated financial statements.

IFRIC 11 (IFRS 2 Group and Treasury Share Transactions) clarifies the issue of how IFRS 2 should be applied to share-based payment arrangements involving the grant of the entity’s own equity instruments or equity instruments of another entity within the same group. The Interpretation is effective for financial years beginning on or after 1 March 2007. As part of the endorsement by the European Union, application of the Interpretation is not mandatory as of the date of initial application envisaged by the IASB, but only starting in financial year 2009. The first-time application of IFRIC 11 is not expected to have any significant effect on the consolidated financial statements.

IFRIC 13 (Customer Loyalty Programmes) sets out the accounting treatment of revenues arising in connection with customer loyalty programmes operated by the manufacturers or service providers themselves or by third parties. As part of the endorsement by the European Union, application of the Interpretation is not mandatory as of the date of initial application envisaged by the IASB, but only starting in financial year 2009. The first-time application of the Interpretation will not have any significant effects on the consolidated financial statements.

IFRIC 14 (IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction) was issued on 5 July 2007 and supplements the existing provisions of IAS 19 relating to the limit on the measurement of a defined benefit asset (IAS 19.58 ff.). In addition, the Interpretation sets out how the requirement to limit a defined benefit asset should be applied in the event of statutory or contractual minimum funding requirements. As part of the endorsement by the European Union in December 2008, application of the Interpretation is not mandatory as of the date of initial application envisaged by the IASB, but only starting in financial years beginning on or after 31 December 2008. The first-time application of IFRIC 14 is not expected to have any significant effects on the consolidated financial statements.

The revision of IAS 1 (Presentation of Financial Statements) is intended to improve users’ ability to analyse and compare the information given in financial statements. The changes relate mainly to revised designations for the income statement, balance sheet and cash flow statement, the introduction of a statement of certain non-owner changes in equity and the obligation to publish an opening balance sheet for the earliest period presented that is affected by a retrospective change of accounting policy or restatement. Application of the revised Standard is mandatory for financial years beginning on or after 1 January 2009. The first-time application of the revised Standard will have no significant effects on the presentation of the consolidated financial statements.

In February 2008, the IASB issued amendments to IAS 32 (Financial Instruments: Disclosure and Presentation). The revision permits puttable instruments to be classified as equity in certain circumstances. The revision of the Standard is intended to allow German partnerships to classify their partnership capital as equity in IFRS consolidated financial statements. Application of the revised Standard is mandatory for periods beginning on or after 1 January 2009. The revised Standard will not apply to the consolidated financial statements.

In May 2008, the IASB issued amendments relating to IFRS 1 (First-Time Adoption of International Financial Reporting Standards) and to IAS 27 (Consolidated and Separate Financial Statements). The amendment to IFRS 1 provides that, in the IFRS opening balance sheet of its separate financial statements, an entity may report the carrying amount of its investment in subsidiaries, jointly controlled entities and associates either at the fair value of the investment at the date of transition to IFRS or at its carrying amount at that date resulting from previously applied accounting principles, instead of at cost. The amendments to IAS 27 remove the definition of the cost method.

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