FINANCIAL STATEMENTS 2010 - Finnlines

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
Finnlines is one of the largest North-European liner shipping
companies, providing sea transport services mainly in the Baltic
and the North Sea. In addition to freight, the company's ro-pax
vessels carry passengers between five countries and eight ports.
The company also provides port services in Helsinki, Turku and
Kotka. Finnlines has subsidiaries or sales offices in Germany,
Belgium, the UK, Sweden, Denmark and Poland and a repre-
sentative office in Russia.
The Group's parent company, Finnlines Plc, is a Finnish pub-
lic limited company, which operates under Finnish jurisdiction
and legislation. The parent company is registered in Helsinki at
Porkkalankatu 20, 00180 Helsinki. Copies of financial statements
can be obtained from www.finnlines.com or the company's head-
quarters. These financial statements were authorised for issue
by the Board of Directors of Finnlines Plc on 2 March 2011. In
accordance with the Finnish Companies Act, the financial state-
ments are presented for approval to the Annual General Meeting.
2. ACCOUNTING PRINCIPLES
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The consolidated financial statements are prepared in accord-
ance with the International Financial Reporting Standards (IFRS),
using the IAS and IFRS standards and SIC and IFRIC interpreta-
tions valid on 31 December 2010. The International Financial Re-
porting Standards mean the standards implemented in the EU by
Regulation (EC) 1606/2002, and the related interpretations. The
notes to the Consolidated Financial Statements also comply with
Finnish accounting and corporate legislation. The Consolidated
Financial Statements are primarily prepared using the acquisition
cost method. Exceptions to this principle are financial assets and
liabilities recognised at fair value through profit or loss.
IMPLEMENTATION OF STANDARDS
New and amended standards adopted in 2010
The following new and revised IFRSs have been adopted in
these consolidated financial statements. The application of these
new and revised IFRSs have not had any material impact on the
amounts reported for the current and prior years but may affect
the accounting for future transactions and events.
• Revised IFRS 3 Business Combinations (issued in 2008)
and consequential amendments to IAS 27, Consolidated
and separate financial statements, IAS 28, Investments
in associates, and IAS 31, Interests in joint ventures, are
effective prospectively to business combinations for which
the acquisition date is on or after the beginning of the first an-
nual reporting period beginning on or after 1 July 2009. The
revised standard continues to apply the acquisition method
to business combinations but with some significant changes
compared with IFRS 3. For example, all payments to purchase
a business are recorded at fair value at the acquisition date,
with contingent payments classified as debt subsequently re-
measured through the statement of comprehensive income.
(figures in EUR thousand, if not stated otherwise)
There is a choice on an acquisition-by-acquisition basis to
measure the non-controlling interest in the acquiree either
at fair value or at the non-controlling interest's proportionate
share of the acquiree’s net assets. Further, under the revised
standard all acquisition-related costs will be expensed.
• Amended IAS 27 Consolidated and Separate Financial
Statements (issued in 2008). The standard requires the ef-
fects of all transactions with non-controlling interests to be
recorded in equity if there is no change in control and these
transactions will no longer result in goodwill or gains and loss-
es. The standard also specifies the accounting when control
is lost. Any remaining interest in the entity is re-measured to
fair value, and a gain or loss is recognised in profit or loss.
• Amendment to IAS 39 Financial Instruments – Recognition
and Measurement – Eligible Hedged Items. The amend-
ment provides clarification on identifying inflation as a hedged
risk and on hedging with options.
• IFRIC 17 Distribution of Non-cash Assets to Owners. The
interpretation provides guidance on the appropriate account-
ing treatment when an entity distributes assets other than
cash as dividends to its shareholders.
• IFRIC 18 Transfers of Assets from Customers. The interpre-
tation addresses the accounting by recipients for transfers of
property, plant and equipment from customers. This interpre-
tation clarifies the requirements of IFRSs for agreements in
which an entity receives from a customer an item of property,
plant and equipment, or cash to acquire such item, that the
entity must then use either to connect the customer to a net-
work or to provide the customer with ongoing access to sup-
ply of goods or services (such as supply of electricity, gas or
water).
• Amendments to IFRS 2, Share-based payment – Group
Cash-settled Share-based Payment Transactions. The
amendments clarify the scope of IFRS 2.
• Improvements to IFRS (April 2009). In the annual im-
provement process IASB deals with non-urgent but neces-
sary amendments to IFRS, which are collected and issued
annually.
Implementation of new and revised standards and interpreta-
tions in future accounting periods
IASB has published the following new or revised standards and
interpretations which the Group has not yet adopted. The Group
will adopt each standard and interpretation as from the effective
date, or if the effective date is other than the first day of the re-
porting period, from the beginning of the next reporting period af-
ter the effective date. The application of these new IFRSs are not
estimated to have a material impact on the amounts reported for
the future periods except for the application of IFRS 9 for which
the management has not yet estimated the possible impact.
• Amendment to IAS 32 Financial Instruments: Presentation
– Classification of Rights Issues (effective for reporting pe-
riods beginning on or after 1 February 2010). The amendment
FINNLINES PLC Financial Statements 2010
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