ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
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eporting enterprise operates. Transactions in currencies other<br />
than the functional currency are accounted for as transactions<br />
in foreign currencies.<br />
On initial recognition, transactions in foreign currencies are<br />
translated into the functional currency at the exchange rates<br />
at the transaction date. Exchange differences arising between<br />
the exchange rates at the transaction date and at the date of<br />
payment are recognised in profit for the year as finance income<br />
or costs.<br />
Receivables, payables and other monetary items in foreign<br />
currencies are translated into the functional currency at the exchange<br />
rates at the balance sheet date. The difference between<br />
the exchange rates at the balance sheet date and at the date<br />
at which the receivable or payable arose or was recognised in<br />
the latest annual report is recognised in profit for the year as<br />
finance income or costs.<br />
On recognition in the consolidated financial statements of<br />
subsidiaries and proportionately consolidated enterprises<br />
with a different functional currency than DKK, the items in<br />
the statement of comprehensive income are translated at the<br />
exchange rates at the transaction date, and the balance sheet<br />
items are translated at the exchange rates at the balance sheet<br />
date. An average exchange rate for each month is used as the<br />
exchange rate at the transaction date to the extent that this<br />
does not significantly distort the presentation of the underlying<br />
transactions. Exchange differences arising on translation of the<br />
opening equity of these enterprises at the exchange rates at<br />
the balance sheet date and on translation of the statements of<br />
comprehensive income from the rates at the transaction date<br />
to the exchange rates at the balance sheet date are recognised<br />
directly in equity within a separate translation reserve. Such<br />
foreign exchange adjustments are allocated between the parent<br />
company’s and the non-controlling interests’ equity.<br />
Foreign exchange adjustments of balances that are accounted<br />
for as part of the total net investment in enterprises with a<br />
different functional currency than DKK are recognised in the<br />
consolidated financial statements directly in equity within a<br />
separate translation reserve. Likewise, foreign exchange gains<br />
and losses on the portion of loans and derivative financial instruments<br />
that has been entered into to hedge the net investment<br />
in these enterprises and that provides an effective hedge<br />
against corresponding foreign exchange gains/losses on the<br />
net investment in the enterprise are taken directly to a separate<br />
translation reserve in equity.<br />
On recognition in the consolidated financial statements of<br />
associates with a different functional currency than DKK,<br />
the share of profit for the year is translated using an average<br />
exchange rate, and the share of equity including goodwill is<br />
translated at the exchange rates at the balance sheet date.<br />
Exchange differences arising on translation of the share of<br />
foreign associates’ opening equity at the exchange rates at<br />
the balance sheet date and on translation of the share of profit<br />
for the year from average rates to the exchange rates at the<br />
balance sheet date are recognised directly in equity within a<br />
separate translation reserve.<br />
When a foreign entity is disposed of, in full or in part, and control<br />
is lost, or when balances that are considered part of the net<br />
investment are repaid, the share of the cumulative exchange<br />
adjustments that is recognised directly in equity relating to<br />
that foreign entity is reclassified to profit for the year together<br />
with any gain or loss on disposal. The part of the translation reserve<br />
that relates to non-controlling interests is not transferred<br />
to profit for the year.<br />
On partial disposal of foreign subsidiaries that does not result<br />
in a loss of control, a proportionate share of the translation<br />
reserve is transferred from the parent company shareholders’<br />
share of equity to the non-controlling interests’ share of equity.<br />
Repayment of balances that are considered to form part of the<br />
net investment does not constitute a partial disposal of the<br />
subsidiary.<br />
Other external expenses<br />
Other external expenses comprise expenses for exploration,<br />
maintenance of production equipment, rent, external assistance,<br />
sales and marketing, research and development, and<br />
office expenses, etc.<br />
staff costs<br />
Staff costs comprise wages, salaries, remuneration, pensions,<br />
social security costs and other staff-related costs.<br />
Other operating income and expenses<br />
Other operating income and expenses comprise items secondary<br />
in nature to the Group’s activities, including gains and<br />
losses on ongoing disposal and replacement of intangible assets<br />
and property, plant and equipment, and grants received<br />
for certain production assets, and research and development<br />
projects.<br />
Grants for production assets and development projects are<br />
recognised as the assets to which they relate are depreciated.<br />
Other income and expenses are recognised as earned/incurred.<br />
Gains and losses on disposal of intangible assets and property,<br />
<strong>DONG</strong> ENERGY <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2011</strong> – COnsOliDatED finanCial statEmEnts<br />
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