ANNUAL REPORT 2008 - Gorenje Group

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The amendments to IFRS 2 are not relevant to the Company’s operations as the
Company does not have any share-based compensation plans.
• Amendments to IAS 1 Presentation of Financial Statements (effective as
from 1 January 2009)
The amended standard requires information in financial statements to be aggregated
on the basis of shared characteristics and introduces a statement of
comprehensive income. Items of costs and expenses and components of other
comprehensive income (effectively combining the income statement and all
non-owner changes in equity in a single statement), or in two separate statements
(a separate income statement followed by a statement of comprehensive
income).
The Company will prepare two separate statements in the financial statements for 2009.
• Amendments to IAS 27 Consolidated and Separate Financial Statements
(effective as from 1 January 2009)
The amendments remove the definition of “cost method” currently set out in
IAS 27, and instead require all dividends from a subsidiary, jointly controlled entity
or associate to be recognised as income in the separate financial statements
of the investor when the right to receive the dividend is established.
Amendments to IAS 27 will have the impact on the Company’s financial statements
as the dividends will be recognised prior to the actual dividend payout.
• Amendments to IAS 32 Financial Instruments: Presentation, and IAS 1
Presentation of Financial Statements (effective as from 1 January 2009)
The amendments introduce an exemption to the principle otherwise applied
in IAS 32 for the classification of instruments as equity; the amendments allow
certain puttable instruments issued by an entity that would normally be classified
as liabilities to be classified as equity if, and only if, they meet certain conditions.
The amendments are not relevant to the Company’s financial statements as no
puttable instruments were issued in the past.
• IFRIC 13 Customer Loyalty Programmes (effective as from 1 July 2008)
It addresses the accounting by entities that participate in customer loyalty programmes
for their customers. It relates to customer loyalty programmes under
which the customer can redeem credits for awards such as free or discounted
goods or services.
IFRIC 13, which becomes mandatory for the Company’s 2009 financial statements,
is not expected to have any impact on the financial statements.
4. Determination of fair value
A number of the Company’s accounting policies and disclosures require the determination of fair
value, for both financial and non-financial assets and liabilities. Fair values have been determined
for measurement and / or disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
(i) Property, plant and equipment
The fair value of property, plant and equipment is based on market values. The market value of
property is the estimated amount for which a property could be exchanged on the date of valuation
between a willing buyer and a willing seller in an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and without compulsion. The
items of plant, equipment, fixtures and fittings are valued at cost.
(ii) Intangible assets
The fair value of intangible assets is estimated as the present value of future cash flows expected to
be derived from the use and eventual sale of the assets.